Portfolio Update

Three Sales, Four Buys & What I Have Planned For Coming Weeks

It’s been a busy week for the portfolio but I wanted to write an update since I have been moving things around over the last week. I sold one of my largest holdings and cut my losses on another. For both it came down to opportunity cost. I just wanted to buy other stuff more than I wanted to hang onto either one. I added some exposure to the offshore sector with a new name that I will write up when I have a chance, but I also dipped my toe into the shipping sector with Navios Maritime Partners NMM 0.00%↑. I also called the African miner help line despite the fact that I try to stay away from the sector, and bought a couple stocks that have exposure to one of the commodities that I’m most bullish on. Over the next month, there is one more stock I’m planning to sell, and I want to size up a couple positions, but I’ll write another portfolio update in August when I get back to Boise.

Navios Maritime Partners: A Borrowed Idea

Some people think R&D stands for research and development. Others think it stands for ripoff and duplicate. It’s a crude way to put it, but I’m always on the hunt for new ideas and this one from Judd Arnold (Lake Cornelia Research Management) caught my eye. His newest pick, Navios Maritime Partners, is how I have decided to dip my toe into the shipping sector, and I think it has a very interesting setup for the next couple years. Despite the name Navios Maritime Partners, the company issues a 1099 and not a K-1. I’m not going to put this part behind the paywall because it’s available to everyone on Twitter, and it’s not my research. I thought it was a thorough look at the company and worth sharing with you, and after doing some of my own digging, I decided to buy some shares.

He goes into Navios’ exposure to dry bulk and capesize and the huge discount to liquidation value as a discount to peers. The report also talks about fleet age, the order book for drybulk and capesize, and insider ownership. I have stayed on the sidelines for the shipping sector for various reasons, but the insider ownership was one of the things I found most interesting about Navios. The CEO owns 16.75% of the company after buying 317k shares in March. The other thing that’s interesting about Navios are the incentive distribution rights (IDRs), which get real interesting if we get a bull cycle for dry bulk and capesize. The IDRs come into effect above $24 per share per year. As always, do your own research and come to your own conclusions. I’ll just suggest that Judd’s work is a good place to start. Here’s a link to the writeup so you can read it for yourself. He also did a podcast on the company if you would rather hear him walk through the bullish thesis.

Calumet Specialty Products Partners & Enovix

I also wanted to write a quick update on a couple holdings for everyone. Calumet’s conversion to a C-Corp from an MLP was approved on Monday, and it will begin trading as a C-Corp today. That means no more K-1, and opens things up for potential new investors and flows into the stock. The stock was up more than 7% yesterday, and we will see how it reacts today. Hopefully the action yesterday was a preview of things to come. The other one I wanted to mention was Enovix ENVX 0.00%↑. Shares have rallied hard over the last couple months and I figured I would share a video from the company. Fab 2 in Malaysia is set to open in August, and I think we will find out sooner rather than later if they can execute and scale production. I don’t bet on short squeezes, but if bulls are right on the company, we could see some fireworks with the 25% short interest.

Portfolio Weights & Other Trades