Canaccord Genuity Starts Navios Acquisition Corp (NM) at Buy
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Canaccord Genuity initiates coverage on Navios Acquisition Corp (NYSE: NM) with a Buy rating and a price target of $14.00.
Analyst Noah Parquette highlights:
- Strong brand and long-term relationships create market opportunity: As head of the Navios group of companies, management maintains significant relationships throughout the industry, particularly with banks, that allow it to see distressed deals earlier than many of its competitors. Furthermore, the company has proven access to multiple forms of capital and has demonstrated an ability to think creatively and a willingness to move quickly to seize on opportunities.
- Low-cost, efficient operator: In total, the Navios group of companies owns and operates 145 ships, which gives it significant cost savings from the purchase of spares and lube in bulk. This, combined with a relatively young and modern fleet, makes Navios one of the lowest cost operators in the public markets, while the structure of its management company (100% owned) reduces conflicts of interest.
- Navios South American Logistics has significant hidden value: In the near term, we believe the stock can benefit from the planned spin-off of the Navios South American Logistics business, which is a uniquely positioned play on the development of the Hidrovia river system in South America, and we believe it is poised for significant growth over the next few years. Based on our forecasts, we think the market is undervaluing this asset.
Shares of Navios Acquisition Corp closed at $9.45 yesterday.
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