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How Financially Strong Is Navios Maritime Holdings Inc (NYSE:NM)?

Donald Bartholomew

Navios Maritime Holdings Inc (NYSE:NM) is a small-cap stock with a market capitalization of US$136.36M. While investors primarily focus on the growth potential and competitive landscape of the small-cap companies, they end up ignoring a key aspect, which could be the biggest threat to its existence: its financial health. Why is it important? Since NM is loss-making right now, it’s essential to evaluate the current state of its operations and pathway to profitability. Here are few basic financial health checks you should consider before taking the plunge. However, given that I have not delve into the company-specifics, I suggest you dig deeper yourself into NM here.

Does NM generate an acceptable amount of cash through operations?

Over the past year, NM has maintained its debt levels at around US$1.65B made up of current and long term debt. At this stable level of debt, NM’s cash and short-term investments stands at US$134.19M , ready to deploy into the business. Moving onto cash from operations, its small level of operating cash flow means calculating cash-to-debt wouldn’t be too useful, though these low levels of cash means that operational efficiency is worth a look. For this article’s sake, I won’t be looking at this today, but you can examine some of NM’s operating efficiency ratios such as ROA here.

Can NM pay its short-term liabilities?

Looking at NM’s most recent US$236.19M liabilities, it seems that the business has been able to meet these obligations given the level of current assets of US$256.08M, with a current ratio of 1.08x. Generally, for Shipping companies, this is a reasonable ratio since there is a bit of a cash buffer without leaving too much capital in a low-return environment.

NYSE:NM Historical Debt Mar 16th 18

Is NM’s debt level acceptable?

With total debt exceeding equities, NM is considered a highly levered company. This is not uncommon for a small-cap company given that debt tends to be lower-cost and at times, more accessible. But since NM is presently loss-making, sustainability of its current state of operations becomes a concern. Maintaining a high level of debt, while revenues are still below costs, can be dangerous as liquidity tends to dry up in unexpected downturns.

Next Steps:

At its current level of cash flow coverage, NM has room for improvement to better cushion for events which may require debt repayment. However, the company exhibits proper management of current assets and upcoming liabilities. I admit this is a fairly basic analysis for NM’s financial health. Other important fundamentals need to be considered alongside. I recommend you continue to research Navios Maritime Holdings to get a better picture of the stock by looking at:


To help readers see pass the short term volatility of the financial market, we aim to bring you a long-term focused research analysis purely driven by fundamental data. Note that our analysis does not factor in the latest price sensitive company announcements.

The author is an independent contributor and at the time of publication had no position in the stocks mentioned.