You might think it’s insane to talk about Greek stocks given the turmoil in Europe lately. But many investors are talking about dabbling in European stocks in the hopes of a brighter 2014 on the continent.
Navios Maritime Holdings (NM) is one option. HM is a Greek shipper that you might have watched collapse in 2008 along with Diana Shipping (DSX) and DryShips (DRYS) thanks to an economic downturn rolled in with a capacity glut for the industry specifically and a horrible environment for Europe broadly.
However, though Navios still is down 50% or so from its 2008 peak, it has stabilized and could be a nice recovery play in the years ahead. Much like railroad stocks, bulk shippers rise and fall with economic activity as more consumer goods and commodities are pushed around the globe.
The biggest risk, of course, is that shipping traffic will stay soft — particularly in commodities like iron ore and coal, which are seeing falling demand thanks to trouble in China. But a lot of that negativity has been priced in, and the other business that will pick up in a recovery will help offset any weakness here.
It’s also worth noting that simply being located in Greece has been counting against this shipping stock. Investors looking to insulate themselves from the European debt crisis aren’t willing to touch any stock in this nation, shipping or otherwise. NM is trading for a big discount right now as a result, and it will see a nice bounce if Europe gets its act together.
Shares of NM stock are up an impressive 80% year-to-date, so clearly some folks see the potential here. Throw in a 4% dividend yield as a sweetener, and you have a decent case for Navios Maritime as a long-term recovery play at around $6 per share.