Weak On High Volume: Navios Maritime Partners L.P (NMM)

Editor's Note: Any reference to TheStreet Ratings and its underlying recommendation does not reflect the opinion of TheStreet, Inc. or any of its contributors including Jim Cramer.

Trade-Ideas LLC identified Navios Maritime Partners L.P ( NMM) as a weak on high relative volume candidate. In addition to specific proprietary factors, Trade-Ideas identified Navios Maritime Partners L.P as such a stock due to the following factors:

  • NMM has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $6.1 million.
  • NMM has traded 759,758 shares today.
  • NMM is trading at 4.93 times the normal volume for the stock at this time of day.
  • NMM is trading at a new low 6.07% below yesterday's close.

'Weak on High Relative Volume' stocks are worth watching because major volume moves tend to indicate underlying activity such as material stock news, analyst downgrades, insider selling, selling from 'superinvestors,' or that hedge funds and traders are piling out of a stock ahead of a catalyst. Regardless of the impetus behind the price and volume action, when a stock moves with strength and volume it can indicate the start of a new trend on which early investors can capitalize (or avoid losses by trimming weak positions). In the event of a well-timed trading opportunity, combining technical indicators with fundamental trends and a disciplined trading methodology should help you take the first steps towards investment success.

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More details on NMM:

Navios Maritime Partners L.P. owns and operates dry cargo vessels in Europe, Asia, North America, and Australia. The stock currently has a dividend yield of 13.6%. NMM has a PE ratio of 14.6. Currently there are 2 analysts that rate Navios Maritime Partners L.P a buy, 1 analyst rates it a sell, and 4 rate it a hold.

The average volume for Navios Maritime Partners L.P has been 867,600 shares per day over the past 30 days. Navios Maritime Partners L.P has a market cap of $1.1 billion and is part of the services sector and transportation industry. The stock has a beta of 1.20 and a short float of 7.4% with 10.11 days to cover. Shares are up 29.5% year-to-date as of the close of trading on Friday.

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TheStreetRatings.com Analysis:

TheStreet Quant Ratings rates Navios Maritime Partners L.P as a hold. The company's strengths can be seen in multiple areas, such as its revenue growth, compelling growth in net income and expanding profit margins. However, as a counter to these strengths, we find that the stock has had a generally disappointing performance in the past year.

Highlights from the ratings report include:
  • The revenue growth came in higher than the industry average of 0.1%. Since the same quarter one year prior, revenues rose by 13.9%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.
  • The gross profit margin for NAVIOS MARITIME PARTNERS LP is currently very high, coming in at 93.12%. It has increased from the same quarter the previous year. Along with this, the net profit margin of 22.67% significantly outperformed against the industry average.
  • NMM's debt-to-equity ratio of 0.78 is somewhat low overall, but it is high when compared to the industry average, implying that the management of the debt levels should be evaluated further. Even though the debt-to-equity ratio shows mixed results, the company's quick ratio of 3.52 is very high and demonstrates very strong liquidity.
  • The return on equity has improved slightly when compared to the same quarter one year prior. This can be construed as a modest strength in the organization. When compared to other companies in the Marine industry and the overall market, NAVIOS MARITIME PARTNERS LP's return on equity is below that of both the industry average and the S&P 500.
  • NMM's stock share price has done very poorly compared to where it was a year ago: Despite any rallies, the net result is that it is down by 31.23%, which is also worse that the performance of the S&P 500 Index. Investors have so far failed to pay much attention to the earnings improvements the company has managed to achieve over the last quarter. Turning toward the future, the fact that the stock has come down in price over the past year should not necessarily be interpreted as a negative; it could be one of the factors that may help make the stock attractive down the road. Right now, however, we believe that it is too soon to buy.

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