We recently published a list of the 10 Best Marine Shipping Stocks to Buy According to Analysts. In this article, we are going to take a look at where Navios Maritime Partners L.P. (NYSE:NMM) stands against the other best marine shipping stocks to buy according to analysts.
Marine shipping is a critical component of the global economy, responsible for transporting approximately 80% of the world’s trade by volume. This industry serves as the backbone of international commerce by facilitating the movement of raw materials, manufactured goods, and energy resources across continents. The maritime shipping industry continues to face significant challenges as geopolitical tensions and security threats escalate in key shipping routes. Shipping companies have been forced to reconsider their routes, with many opting to divert vessels around the Cape of Good Hope, significantly increasing fuel costs and delivery times. These disruptions have far-reaching economic consequences, affecting supply chains and global trade.
Years of Challenges
In an interview with CNBC on November 27, Adrian Beciri, CEO of Ducat Maritime said that marine shipping has faced a series of setbacks over the years, including the disruptions caused by the COVID-19 pandemic, hyperinflation, manpower shortages, and the aftermath of conflicts such as the war in Ukraine and tensions in the Middle East, including the blockage of the Suez Canal. These events have compounded the issues within the marine shipping sector and continue to affect the industry.
Beciri highlighted the intrinsic difficulties of the shipping sector, particularly the demanding nature of the work, coupled with economic challenges that have contributed to a labor shortage in the shipping industry, a problem that is often overlooked by the broader market. The CEO also expressed concerns about the potential impact of the president-elect’s announcement of new tariffs on several countries, which could further complicate supply chains and necessitate a shift towards regional or zonal trading blocks. Such a shift could disrupt the historical patterns of international trade, which are based on the comparative advantages of large nations and the principles of free trade. Looking ahead, Beciri emphasized the importance of stable and consistent markets and policies to foster long-term investments and adjustments within the industry. He called for a conducive environment that would allow firms to make significant investments.
Despite the mounting challenges faced by the maritime shipping industry, it remains an indispensable pillar of global trade.
A large container ship floating in a harbor, its cargo illuminated by the setting sun.
Our Methodology
To compile our list of the 10 best marine shipping stocks to buy according to analysts, we used Finviz and Yahoo stock screeners to find marine shipping companies with a market cap of over $500 million as of December 24. From that list, we narrowed our choices to 10 stocks that analysts see the most upside to. We also included the number of hedge fund holders for these companies, which was sourced from Insider Monkey’s Hedge Fund database as of Q3 2024. The list is sorted in ascending order of analysts’ average upside potential, as of December 24.
Why do we care about what hedge funds do? The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter’s strategy selects 14 small-cap and large-cap stocks every quarter and has returned 275% since May 2014, beating its benchmark by 150 percentage points (see more details here).
Navios Maritime Partners L.P. (NYSE:NMM)
Upside Potential: 71.21%
Number of Hedge Fund Investors: 11
Stock Price as of December 24: $44.39
Navios Maritime Partners L.P. (NYSE:NMM) is a global owner and operator of dry bulk and container vessels, providing maritime logistics solutions across the globe. The company operates a versatile fleet of 179 vessels spread across 16 asset classes in three sectors: dry bulk, tanker, and container. Navios Maritime Partners L.P. (NYSE:NMM) caters to both short-term and long-term charter agreements.
Following three new vessel deliveries in Q3 and early Q4, the company has a robust pipeline of 27 additional newbuild vessels scheduled to join the fleet through 2028, representing a significant investment of $1.9 billion. In the containership segment, the company has eight vessels to be delivered, with a total acquisition price of $800 million. These vessels are backed by long-term, creditworthy charters expected to generate approximately $800 million in revenue over an average charter duration of 6.6 years. In the tanker segment, the company has 19 vessels to be delivered, with a total price of approximately $1.1 billion. Fifteen of these vessels have already been chartered out for an average period of five years, expected to generate aggregate contracted revenue of about $700 million.
The company is also actively managing its fleet composition to ensure optimal performance and efficiency. In 2024, the company sold nine older vessels with an average age of 17.5 years for $183 million. Simultaneously, it exercised purchase options on five charter-in Japanese-built vessels with an average age of 8 years for a total price of $142.1 million.
This initiative aims to maximize energy efficiency by maintaining a fleet of vessels with the latest technology, enhancing the company’s operational efficiency, reducing its carbon footprint, and positioning the company to capitalize on long-term charter agreements with creditworthy counterparties.
Overall, NMM ranks 4th on our list of best marine shipping stocks to buy according to analysts. While we acknowledge the potential of NMM to grow, our conviction lies in the belief that AI stocks hold greater promise for delivering higher returns and doing so within a shorter time frame. If you are looking for an AI stock that is more promising than NMM but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
READ NEXT: 8 Best Wide Moat Stocks to Buy Now and 30 Most Important AI Stocks According to BlackRock.
Disclosure: None. This article is originally published at Insider Monkey.