Stock Alert for DryShips Inc. (DRYS)
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    Stock Alert for DryShips Inc. (DRYS)

    DryShips Inc. (DRYS) is a Greece-based global provider of marine transportation services for drybulk and petroleum cargoes and off-shore contract drilling oil services. Through its majority owned subsidiary, Ocean Rig UDW Inc., the Company owns and operates nine offshore ultra deepwater drilling units, comprising of two ultra deepwater semisubmersible drilling rigs and seven ultra deepwater drillships, five of which remain to be delivered to the Company during 2011 and 2013. As of July 21, 2011, DRYS owns a fleet of 38 drybulk carriers (including newbuildings), comprising nine Capesize, 27 Panamax and two Supramax, with a combined deadweight tonnage of over 3.4 million tons, and 12 tankers (including newbuildings), comprising six Suezmax and six Aframax, with a combined deadweight tonnage of over 1.6 million tons.

    Share Statistics (22-July-11) FY2009 FY2010 % Chg Q12010 Q12011 % Chg
    Symbol DRYS Revenue, $Mn 819.83 859.75 4.9% 194.16 207.41 6.8%
    Current price $3.94 Gross marg. 71.9% 74.6% 3.8% 71.5% 66.5% -7.0%
    52wk Range: $3.56-6.44 Oper. margin 9.9% 42.7% 331.3% 27.2%
    Avg Vol (3m): 8,174,080 Net margin -3.9% 21.9% -661.5% 6.8% 12.4% 82.4%
    Market Cap. 1.52B
    Shares Outstanding 388.89M EPS, $ 0.63 0.59 -6.3% 0.02 0.08 300.0%

    Source: Reuters.com, SEC Filings.

    Recent News

    DRYS shares dropped 2.36% to close Friday’s session at $3.94, extending the prior day’s 0.49% decline.  Nearly 6 million shares have traded hands during the session versus the 10-day average volume of 7.12 million.  The stock has been moving within a range of $3.56 – $6.44 over the past 52-weeks. DRYS is currently trading below its 50-day moving average of $3.99 and below its 200-day moving average $4.58. Market capitalization currently stands at 1.53 billion and it has 388.89 million outstanding shares.

    The Company on Thursday announced the recent sale of a number of older dry bulk vessels which is part of a fleet renewal program.  It reported four of its vessels had an aggregate sale price of $75.5 million, resulting in an aggregate book loss of $106.9 million. CEO George Economou said the prevailing low freight rates, given the  current fleet oversupply, has led to a decline in asset values in general but was even sharper for older ships.

    Economou added that given the number of newbuildings that have joined the fleet and expected deliveries over the next two years, the Company expects heightened charterer discrimination against older vessels and a consequential acceleration in the decline in values.

    “With this in mind we have sold eight older vessels since January 2010. In the near term we will focus on replacing these vessels by acquiring vessels or fleets with fixed rate employment and financing in place,” he stated.

    Financial Summary

    DRYS reported net income of $25.8 million, or $0.07 basic diluted earnings per share, for the first quarter ended March 31, 2011, up from $13.3 million, or $0.04 basic and diluted earnings per share, in the comparable period last year.  Adjusted EBITDA, which represents net income before interest, taxes, depreciation and amortization and gains or losses on interest rate swaps, was $107.1 million for the first quarter of 2011, as compared to $116.5 million for the same period in 2010. Included in the first-quarter 2011 results are various items totaling $30.3 million, or $0.08 per share. Excluding these items, the Company’s adjusted net income would have amounted to $56.1 million, or $0.15 per share.

    Basic earnings per share for the first quarter of 2011 includes a reduction to net income amounting to $2.5 million relating to the cumulative payment-in-kind dividends on the Series A Convertible Preferred Stock, which reduces the income available to common shareholders.

    DRY’s drybulk and tanker carrier segment posted net voyage revenues (voyage revenues minus voyage expenses) of $91.6 million for the three-month period ended March 31, 2011, down from the year-ago period’s $106.9 million.  Its offshore drilling segment posted revenues from drilling contracts of $109.3 million for the quarter, up from $80.3 million for the same period in 2010.

    Financial Strength (22-July-2011)

    Company

    Industry

    Sector

    S&P 500

    Quick Ratio (MRQ) 1.13 1.30 0.67
    Current Ratio (MRQ) 0.72 1.29 1.63 1.01
    LT Debt to Equity (MRQ) 58.57 91.47 50.29 124.38
    Total Debt to Equity (MRQ) 77.71 107.90 71.31 163.81
    Interest Coverage (TTM) 2.34 0.04 0.20 19.07

    Source: Reuters.com, SEC Filings.

    Analyst Consensus

    This is the consensus forecast among 16 polled investment analysts. Against the Dryships Inc company.

    Analyst Detail

    Buy

    Outperform

    Hold

    Underperform

    Sell

    No Opinion

    Latest 6 4 4 1 1 0
    4 weeks ago 6 4 4 1 1 0
    2 months ago 4 2 9 1 1 0
    3 months ago 4 3 9 1 1 0
    Last year 6 3 4 1 0 0

    The 14 analysts offering 12-month price targets for DRYS have a median target of 6.00, with a high estimate of 9.00 and a low estimate of 4.00. The median estimate represents a 48.88% increase from the last price of 4.03.

    Source: markets.ft.com

    Consensus Estimates Analysis

    # of Estimates

    Mean

    High

    Low

    1 Year Ago

    SALES (in millions)
    Quarter Ending Sep-11 10 321.97 360.85 265.00 329.07
    Quarter Ending Dec-11 10 349.38 417.90 271.00 376.74
    Year Ending Dec-11 16 1,148.45 1,268.30 1,034.00 1,110.58
    Year Ending Dec-12 15 1,432.33 1,691.30 1,310.11 1,388.42
    EARNINGS (per share)
    Quarter Ending Sep-11 11 0.22 0.39 0.06 0.27
    Quarter Ending Dec-11 11 0.21 0.37 0.03 0.36
    Year Ending Dec-11 15 0.77 1.24 0.37 1.03
    Year Ending Dec-12 14 0.85 1.42 0.50 1.34
    LT Growth Rate (%) 2 5.50 10.00 1.00 18.00

    Technical Analysis

     

    Source: http://stockcharts.com

    DRYS is near its lower Bollinger Band. This suggests that it is at a low level relative to recent action.

    The MACD for DRYS currently indicates a strong bearish signal for two reasons. First, the MACD is below the signal line, a 9-day moving average. Second, the MACD is below the critical level of 0, which implies that the underlying moving averages are trending lower.

    Comparative Analysis

    Company Name Ticker Price per Mrkt. Cap. P/E P/S
    July22-2011 symbol Share, $ $ Mn 2011 2012 2011 2012
    Eagle Bulk Shipping Inc. EGLE 2.63 164.53M n/a 65.75 0.56 0.53
    Excel Maritime Carriers Ltd. EXM 2.73 228.34M n/a n/a 0.74 0.82
    NewLead Holdings Ltd. NEWL 1.90 14.70M n/a n/a 0.20 n/a
    Genco Shipping & Trading Ltd. GNK 6.54 229.83M 9.08 n/a 0.59 0.65
    Diana Shipping Inc. DSX 9.90 801.55M 7.17 10.53 3.15 3.58
    Shipping Median       15.00 n/a 1.37 n/a
    DryShips Inc. DRYS 3.91 1.52B 4.71 4.60 1.33 1.06

    Source: Thomson Financial

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