Navios Maritime Holdings Inc. (NM)

I found this interesting from the earnings presentation:

“ 11.25% Senior Secured Notes maturing in August 2022

Holders owning more than 50% of the principal amount of bonds outstanding agreed to waive the springing maturity, subject to an IPO of Navios Logistics by September 2021 with minimum pre-money equity value and secondary sale proceeds”

Seems the NASLI IPO will move forward...

Here are my thoughts on the NSM deal.
They are shifting the 2% general partnership over to NSM, not the 18.5% limited partnership. FYI, Common unitholders still hold 79.5% of NMM limited partnership interest. The NMCI general partnership interest shifting over to NSM was non-economic. I figure the values of both NMM and NMCI GP was less than $4 million at today’s market cap. NM will receive around $19.7 million for the sale of their ship management. Then they received a decent daily rate for technical and commercial management services at a fixed rate of $3.7K per day for 2 years. From the presentation it was said this amount was around 30% lower than the typical rate. There’s a fixed 3% increase a year for the following 3 years. The $ 125 million loan is scheduled to be paid back over 5 years at 5-7% interest rate. Payback of $47 million the first year starting in 2020 and $19.5 million each of the next 4 years. Finally, by virtue of the loan, Navios Holdings was able to convert short-term liabilities into long-term liability. These details and more can be found from today’s presentation transcript and from the slide presentation.

BDI was somewhat better in q2 compared to q1 and seems to rise so this stock could also rise from todays drop.

we have to know what AF plans with that deal though.
He owns 29.5% in NM so he will loose a lot of money if NM tanks

The BDI is finally recovering and has topped 2,000 today for the first time in years. That is more than double its bottom of 560 earlier this year. Prices are firming for all shipping and the profits look like they will return. IF they can hold at these rate levels. IF the world economy holds up, IF China continues to import at these levels, IF the USA doesn't get stupid with tariffs. The BDI needs to hold above 1500 for at least 6 months to get the shipping companies like NM into the black. The price of NM will rise along with the rates. The 2nd QTR results will again be disappointing because the rates were so low, NM is about to report another significant loss for the QTR just ending in June. The stock price will probably fade a bit to below $5, a buying opportunity. I would buy massive amounts of NM common for less than $5 and sell covered calls in either Sep/Dec for about $1 for a nice 20% gain in less than 6 months. If you try to hold it and wait for the price to appreciate, then be aware that results for the 3rd and 4th qtrs will reflect the low BDI prices of the first half and the stock price will pull back a bit with each qtr. Hopefully the BDI will hold and NM will begin to show a profit next year, maybe even the 1st Qtr,

Based on page 9 of Q3 2017 presentation, they assume with rates of BDI of October 31, 2017 (1522) they calculate daily charter out revenues of $12,734...while costs including capital repayments and huge interest costs are projected for $10,906.
If BDI now on December 1, 2017 is over 1600 and if assume the costs are staing the same, them every point of BDI above 1522 reflect into additional net increase of profit and free cash flow (revenue$12,734 - costs$10,906=profit$1828) so they should be over $2000 average profit
with projected Total Available Days of Core Fleet: 5704 in Q4 2017 they should be able to reach profit of 5704days x $2000 average profi = $11,408,000...O/S number cuurently 116m gives diluted EPS 11.408/116=0.098 per quarter. That equals to annual 4x 0.098 = 0.39. With P/E ratio = 7 I see this stock PPS somewhere at 2.73.

On the same page of their Q3 2017 presentation they calculate daily charter out revenues for 2018 at $15,075. So if BDI will keep on rising, they will be able to use the cash on debt reduction, which currently generates cca 1/3 of ther costs. As i understand they have renegotiated the possibility to repay the debt partially or in the whole anytime.

Conclusion: Current market cap 162.22M and pps 1.38 does not reflect current development of BDI, which, based on current scraping plans for 2018 and increasing demand for shipping should keep on rising remarkably. Based on this fact I consider NM as undervalued with potential of 50-100% increase in pps in next 6-12 months...
I know this calculation is very simple, but for me it is adequate to make the general judgement.. but I would be fine if this board can tear it up appart. In fact any logical explanation why NM common should not go up from 1.30-1.40 level is welcome...

The future of NM looks pretty bright with the BDI recovering to over 1700 this past week. Unfortunately, it spent most of the first half of 2019 below 1000 and the 2nd qtr earnings are going to reflect that. Just as the 1st qtr did. Add the buying and selling of some of the fleet ships and the accompanying "impairment charges" and I suspect NM will show a significant loss in the 2nd qtr. Also unfortunate is that the ships chartered out in the first two qtrs of 2019 when the BDI was falling off a cliff, probably won't be significantly re-priced until next year some time, which means half of the fleet is chartered out at low prices and the entire year is likely to show losses. Oh well, maybe next year. The stock price of NM should continue to rise and fall with the BDI, buy low, sell high.

Navios Europe II Liquidation
~ $31.5 million (1) receivable to be transformed into cash and steel value
• $7.9 million (1) cash
• Two unencumbered Panamax vessels
Approved by Navios Holdings’ Special Committee Expected to be finalized in Q2 2020