Navios Maritime Debt
Navios Maritime Midstream has over 196.01 Million in debt which may indicate that it relies heavily on debt financing. . Navios Maritime's financial risk is the risk to Navios Maritime stockholders that is caused by an increase in debt.
Asset vs Debt
Equity vs Debt
Navios Maritime's liquidity is one of the most fundamental aspects of both its future profitability and its ability to meet different types of ongoing financial obligations. Navios Maritime's cash, liquid assets, total liabilities, and shareholder equity can be utilized to evaluate how much leverage the Company is using to sustain its current operations. For traders, higher-leverage indicators usually imply a higher risk to shareholders. In addition, it helps Navios Stock's retail investors understand whether an upcoming fall or rise in the market will negatively affect Navios Maritime's stakeholders.
For most companies, including Navios Maritime, marketable securities, inventories, and receivables are the most common assets that could be converted to cash. However, for Navios Maritime Midstream, the most critical issue when managing liquidity is ensuring that current assets are properly aligned with current liabilities. If they are not, Navios Maritime's management will need to obtain alternative financing to ensure there are always enough cash equivalents on the balance sheet to meet obligations.
Given that Navios Maritime's debt-to-equity ratio measures a Company's obligations relative to the value of its net assets, it is usually used by traders to estimate the extent to which Navios Maritime is acquiring new debt as a mechanism of leveraging its assets. A high debt-to-equity ratio is generally associated with increased risk, implying that it has been aggressive in financing its growth with debt. Another way to look at debt-to-equity ratios is to compare the overall debt load of Navios Maritime to its assets or equity, showing how much of the company assets belong to shareholders vs. creditors. If shareholders own more assets, Navios Maritime is said to be less leveraged. If creditors hold a majority of Navios Maritime's assets, the Company is said to be highly leveraged.
Navios |
Navios Maritime Midstream Debt to Cash Allocation
Navios Maritime Midstream has 196.01 M in debt with debt to equity (D/E) ratio of 88.7, demonstrating that the company may be unable to create cash to meet all of its financial commitments. Navios Maritime Midstream has a current ratio of 5.5, demonstrating that it is liquid and is capable to disburse its financial commitments when the payables are due. Note however, debt could still be an excellent tool for Navios to invest in growth at high rates of return.Navios Maritime Assets Financed by Debt
Typically, companies with high debt-to-asset ratios are said to be highly leveraged. The higher the ratio, the greater risk will be associated with the Navios Maritime's operation. In addition, a high debt-to-assets ratio may indicate a low borrowing capacity of Navios Maritime, which in turn will lower the firm's financial flexibility.Navios Maritime Corporate Bonds Issued
Pair Trading with Navios Maritime
One of the main advantages of trading using pair correlations is that every trade hedges away some risk. Because there are two separate transactions required, even if Navios Maritime position performs unexpectedly, the other equity can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Navios Maritime will appreciate offsetting losses from the drop in the long position's value.The ability to find closely correlated positions to NRG Energy could be a great tool in your tax-loss harvesting strategies, allowing investors a quick way to find a similar-enough asset to replace NRG Energy when you sell it. If you don't do this, your portfolio allocation will be skewed against your target asset allocation. So, investors can't just sell and buy back NRG Energy - that would be a violation of the tax code under the "wash sale" rule, and this is why you need to find a similar enough asset and use the proceeds from selling NRG Energy to buy it.
The correlation of NRG Energy is a statistical measure of how it moves in relation to other instruments. This measure is expressed in what is known as the correlation coefficient, which ranges between -1 and +1. A perfect positive correlation (i.e., a correlation coefficient of +1) implies that as NRG Energy moves, either up or down, the other security will move in the same direction. Alternatively, perfect negative correlation means that if NRG Energy moves in either direction, the perfectly negatively correlated security will move in the opposite direction. If the correlation is 0, the equities are not correlated; they are entirely random. A correlation greater than 0.8 is generally described as strong, whereas a correlation less than 0.5 is generally considered weak.
Correlation analysis and pair trading evaluation for NRG Energy can also be used as hedging techniques within a particular sector or industry or even over random equities to generate a better risk-adjusted return on your portfolios.Check out Correlation Analysis to better understand how to build diversified portfolios. Also, note that the market value of any company could be closely tied with the direction of predictive economic indicators such as signals in nation. You can also try the Portfolio Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.
Other Consideration for investing in Navios Stock
If you are still planning to invest in Navios Maritime Midstream check if it may still be traded through OTC markets such as Pink Sheets or OTC Bulletin Board. You may also purchase it directly from the company, but this is not always possible and may require contacting the company directly. Please note that delisted stocks are often considered to be more risky investments, as they are no longer subject to the same regulatory and reporting requirements as listed stocks. Therefore, it is essential to carefully research the Navios Maritime's history and understand the potential risks before investing.
| Crypto Correlations Use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins | |
| AI Portfolio Architect Use AI to generate optimal portfolios and find profitable investment opportunities | |
| ETFs Find actively traded Exchange Traded Funds (ETF) from around the world | |
| Sectors List of equity sectors categorizing publicly traded companies based on their primary business activities | |
| Investing Opportunities Build portfolios using our predefined set of ideas and optimize them against your investing preferences | |
| Stocks Directory Find actively traded stocks across global markets | |
| Technical Analysis Check basic technical indicators and analysis based on most latest market data | |
| Piotroski F Score Get Piotroski F Score based on the binary analysis strategy of nine different fundamentals | |
| Fundamental Analysis View fundamental data based on most recent published financial statements |
What is Financial Leverage?
Financial leverage is the use of borrowed money (debt) to finance the purchase of assets with the expectation that the income or capital gain from the new asset will exceed the cost of borrowing. In most cases, the debt provider will limit how much risk it is ready to take and indicate a limit on the extent of the leverage it will allow. In the case of asset-backed lending, the financial provider uses the assets as collateral until the borrower repays the loan. In the case of a cash flow loan, the general creditworthiness of the company is used to back the loan. The concept of leverage is common in the business world. It is mostly used to boost the returns on equity capital of a company, especially when the business is unable to increase its operating efficiency and returns on total investment. Because earnings on borrowing are higher than the interest payable on debt, the company's total earnings will increase, ultimately boosting stockholders' profits.Leverage and Capital Costs
The debt to equity ratio plays a role in the working average cost of capital (WACC). The overall interest on debt represents the break-even point that must be obtained to profitability in a given venture. Thus, WACC is essentially the average interest an organization owes on the capital it has borrowed for leverage. Let's say equity represents 60% of borrowed capital, and debt is 40%. This results in a financial leverage calculation of 40/60, or 0.6667. The organization owes 10% on all equity and 5% on all debt. That means that the weighted average cost of capital is (.4)(5) + (.6)(10) - or 8%. For every $10,000 borrowed, this organization will owe $800 in interest. Profit must be higher than 8% on the project to offset the cost of interest and justify this leverage.Benefits of Financial Leverage
Leverage provides the following benefits for companies:- Leverage is an essential tool a company's management can use to make the best financing and investment decisions.
- It provides a variety of financing sources by which the firm can achieve its target earnings.
- Leverage is also an essential technique in investing as it helps companies set a threshold for the expansion of business operations. For example, it can be used to recommend restrictions on business expansion once the projected return on additional investment is lower than the cost of debt.