What to Buy: Navios Maritime Partners LP (NYSE: NMM)

Why to Buy Now: Navios’ unitholders have been on a wild ride the past few years, as the dry bulk shipping market has suffered a steep contraction. Following their trough amid the Great Recession, unit prices climbed as high as $21.38 in early 2011, falling as low as $11.31 later that year, and have essentially traded in a range between $14 per unit and $16 per unit since then.

While a number of aggressive investors had been enticed by the master limited partnership’s (MLP) double-digit yield during that time, we had been leery of Navios’ near-term prospects, in general, and the sustainability of its distribution, in particular, since it was barely covering its payout amid a depressed shipping market. And with a number of long-term charters expiring next year, with new charters likely at substantially lower rates, a distribution cut was a distinct possibility.

But the MLP’s shrewd management team engineered a transformative acquisition of five container vessels that, according to Wells Fargo analysts, should mean the distribution is largely secure through the end of 2015. Management, itself, has committed to the current $0.4425 quarterly distribution, which sums to $1.77 annually, through 2014.

The deal was announced via the company’s third-quarter earnings release on Oct. 31, and unit prices jumped as high as $17.06 per unit from just over $15 per unit prior to that. Prices have since fallen to around $16.50 per unit, for a current yield of 10.8 percent.

Even if the dry bulk shipping market suffers further headwinds in the near term, we’re being amply compensated to await a rebound over the medium term. Buy Navios Maritime Partners LP below 17.70.