The man regarded as "the dean" of US shipping analysts has strong views on Navios Maritime Partners’ attempts to move forward as an owner of diversified assets.
Jonathan Chappell of Evercore ISI said Angeliki Frangou will not be hearing his advice for the first time in TradeWinds, as he has already conveyed it directly to Navios management.
"I’ve told them I think the diversified strategy is exactly how you should run a shipping company,” Chappell said.
"It helps hedge you against downturns in some segments. It gives you longer-term sustainability. Some of the most successful companies in history have been diversified."
One might sense there is a "but" coming, and Chappell is quick to deliver it.
"But I still don’t think it’s the right strategy for a public shipping company. Investors want to own a shipping company in the right time in the cycle," he said.
"These are rental stocks. You want maximum leverage in that particular segment. You don’t want to be weighed down by exposure to another segment."
Chappell has been covering shipping stocks since 2001, at JP Morgan then, and was recently voted shipping’s top equity analyst in a survey by Institutional Investor magazine.
He conceded there is not a lot of evidence for share performance of diversified owners since so few have strayed from the recommended "pure play" focus on one asset class.
He mentioned the relatively diversified Tsakos Energy Navigation as a chronic underperformer in the tanker sector, and the “old” Overseas Shipholding Group as trailing more focused owners such as Frontline and even the former General Maritime in its time.
"Investors want inflection points," Chappell said. "They want the most earnings and dividend upside they can get in a hot market.
"If you have a public bulker owner, with the market on fire, start buying tankers because that sector is in a cyclical low point, that just angers the shareholder base.
"I have pretty high conviction on this and I told Navios as much."
Once its purchase of Navios Maritime Acquisition is made final, Navios Maritime Partners will become a 143-ship goliath with 55 bulkers, 43 containerships and 45 tankers.