NVGS Is Proof That the Stock Market is Inefficient

Navigator’s stock has fallen more than 40% as investors panic over the drop in oil. The reality, however, is that NVGS has little to do with oil prices.

Author:: Jack Mohr
Publish date:: Jan 20, 2015 3:19 PM EST

Are you looking for value following the energy sell-off, but worried about catching a falling knife? Check out Navigator Gas Holdings, a shipping company that's the owner and operator of the world's largest fleet of handysize liquefied gas carriers. Over the past three months, Navigator’s stock has fallen more than 40% as investors panic over the drop in oil. The reality, however, is that Navigator has very little to do with oil prices - we know this because throughout this whole period where the stock has been obliterated, the actual day rates (or price of renting one of their ships) have stayed the same, at around $35,000 per day. If the oil collapse hasn't impacted the company's ability to make money, it's kind of crazy to think it's done such a number on the share price. Navigator is also the undisputed leader in its space, with over 50% practical market share. The stock is also insanely cheap, trading at just five times its 2017 earnings. So when searching for opportunity in energy, embrace this baseless fear, and take advantage of the market's inefficiencies.