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Are Investors Undervaluing Navios Maritime Partners LP (NMM) Right Now?

Zacks Equity Research

Here at Zacks, our focus is on the proven Zacks Rank system, which emphasizes earnings estimates and estimate revisions to find great stocks. Nevertheless, we are always paying attention to the latest value, growth, and momentum trends to underscore strong picks.

Looking at the history of these trends, perhaps none is more beloved than value investing. This strategy simply looks to identify companies that are being undervalued by the broader market. Value investors use tried-and-true metrics and fundamental analysis to find companies that they believe are undervalued at their current share price levels.

On top of the Zacks Rank, investors can also look at our innovative Style Scores system to find stocks with specific traits. For example, value investors will want to focus on the "Value" category. Stocks with high Zacks Ranks and "A" grades for Value will be some of the highest-quality value stocks on the market today.

One stock to keep an eye on is Navios Maritime Partners LP (NMM). NMM is currently sporting a Zacks Rank of #1 (Strong Buy), as well as a Value grade of A.

Another notable valuation metric for NMM is its P/B ratio of 0.27. Investors use the P/B ratio to look at a stock's market value versus its book value, which is defined as total assets minus total liabilities. This stock's P/B looks solid versus its industry's average P/B of 0.78. Within the past 52 weeks, NMM's P/B has been as high as 0.31 and as low as 0.17, with a median of 0.23.

Value investors also frequently use the P/S ratio. This metric is found by dividing a stock's price with the company's revenue. This is a popular metric because sales are harder to manipulate on an income statement, so they are often considered a better performance indicator. NMM has a P/S ratio of 0.9. This compares to its industry's average P/S of 1.09.

Finally, we should also recognize that NMM has a P/CF ratio of 2.79. This metric takes into account a company's operating cash flow and can be used to find stocks that are undervalued based on their solid cash outlook. This stock's P/CF looks attractive against its industry's average P/CF of 8.66. Over the past year, NMM's P/CF has been as high as 6.49 and as low as 2.34, with a median of 3.04.

Value investors will likely look at more than just these metrics, but the above data helps show that Navios Maritime Partners LP is likely undervalued currently. And when considering the strength of its earnings outlook, NMM sticks out at as one of the market's strongest value stocks.


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