DryShips Inc. (DRYS) is a 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., DRYS owns and operates nine offshore ultra deepwater drilling units, comprising of two ultra deepwater semisubmersible drilling rigs and seven ultra deepwater drillships, four of which remain to be delivered to Ocean Rig UDW Inc. during 2011 and 2013.  DRYS owns a fleet of 37 drybulk carriers (including newbuildings), comprising nine Capesize, 26 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 (15-Aug-11)

Source: Reuters.com, SEC Filings.

Recent News

Shares of DRYS traded as much as 15.8% higher on Monday on no company news. Over the weekend, SeekingAlpha published an article highlighting DRYS as one of the those stocks under $5 with high profitability. The stock climbed to an intraday high of $3.15 on Monday as trading volume reached 12.05  million shares.  It has been moving within a range of $2.19 – $6.44 over the past 52-weeks. It  is currently trading below its 50-day moving average of $3.71 and below its 200-day moving average of $4.35.

Early this month, the Greece-based dry cargo shipper announced it will partially spin off its interest in its majority-owned drilling unit Ocean Rig UDW Inc. The Company said it will distribute about 3 million shares of Ocean Rig common stock by September 21, which will reduce the Company’s ownership interest by approximately 2% to 76%.

“The investment decision that was taken in 2007 to diversify into the ultra deepwater drilling sector is set to be a profitable venture that we believe will deliver substantial value to DryShips shareholders,” CEO George Economou commented in the press release.  “We believe that the intrinsic value of Ocean Rig is substantially higher than what has been used to determine the number of shares that will be distributed, thereby implying a much higher dollar value to the shareholders than the $50 million headline number. This dividend is the first step in delivering value to our shareholders from the Ocean Rig investment and we are considering further alternatives including regular dividends and stock buybacks.”

DRYS is expected to release its second-quarter results this week.

Financial Summary

DRYS posted a 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.

DRYS’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.

Technical Analysis

Source: http://stockcharts.com

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

Source: Thomson Financial

DO NOT BASE ANY INVESTMENT DECISION UPON ANY MATERIALS FOUND ON THIS REPORT. We are not registered as a securities broker-dealer or an investment adviser either with the U.S. Securities and Exchange Commission (the “SEC”) or with any state securities regulatory authority.  We are neither licensed nor qualified to provide investment advice.

The information contained in our report should be viewed as commercial advertisement and is not intended to be investment advice.  The report is not provided to any particular individual with a view toward their individual circumstances. The information contained in our report is not an offer to buy or sell securities.  We distribute opinions, comments and information free of charge exclusively to individuals who wish to receive them.

Our newsletter and website have been prepared for informational purposes only and are not intended to be used as a complete source of information on any particular company.  An individual should never invest in the securities of any of the companies profiled based solely on information contained in our report.  Individuals should assume that all information contained in the report about profiled companies is not trustworthy unless verified by their own independent research.

Any individual who chooses to invest in any securities should do so with caution.  Investing in securities is speculative and carries a high degree of risk; you may lose some or all of the money that is invested.  Always research your own investments and consult with a registered investment advisor or licensed stock broker before investing.

Information contained in our report will contain “forward looking statements” as defined under Section 27A of the Securities Act of 1933 and Section 21B of the Securities Exchange Act of 1934.  Subscribers are cautioned not to place undue reliance upon these forward looking statements.  These forward looking statements are subject to a number of known and unknown risks and uncertainties outside of our control that could cause actual operations or results to differ materially from those anticipated.  Factors that could affect performance include, but are not limited to, those factors that are discussed in each profiled company’s most recent reports or registration statements filed with the SEC.  You should consider these factors in evaluating the forward looking statements included in the report and not place undue reliance upon such statements.

We are committed to providing factual information on the companies that are profiled.  However, we do not provide any assurance as to the accuracy or completeness of the information provided, including information regarding a profiled company’s plans or ability to effect any planned or proposed actions.  We have no first-hand knowledge of any profiled company’s operations and therefore cannot comment on their capabilities, intent, resources, nor experience and we make no attempt to do so.  Statistical information, dollar amounts, and market size data was provided by the subject company and related sources which we believe to be reliable.

To the fullest extent of the law, we will not be liable to any person or entity for the quality, accuracy, completeness, reliability, or timeliness of the information provided in the report, or for any direct, indirect, consequential, incidental, special or punitive damages that may arise out of the use of information we provide to any person or entity (including, but not limited to, lost profits, loss of opportunities, trading losses, and damages that may result from any inaccuracy or incompleteness of this information).

We encourage you to invest carefully and read investment information available at the websites of the SEC at http://www.sec.gov and FINRA at http://www.finra.org.

Related Articles

1. Stock Alert for DryShips Inc. (DRYS)
2. Stock Alert for Gasco Energy Inc. (GSX)
3. Stock Alert for Hercules Offshore Inc. (HERO)

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.

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

Source: Thomson Financial

DO NOT BASE ANY INVESTMENT DECISION UPON ANY MATERIALS FOUND ON THIS REPORT. We are not registered as a securities broker-dealer or an investment adviser either with the U.S. Securities and Exchange Commission (the “SEC”) or with any state securities regulatory authority.  We are neither licensed nor qualified to provide investment advice.

The information contained in our report should be viewed as commercial advertisement and is not intended to be investment advice.  The report is not provided to any particular individual with a view toward their individual circumstances. The information contained in our report is not an offer to buy or sell securities.  We distribute opinions, comments and information free of charge exclusively to individuals who wish to receive them.

Our newsletter and website have been prepared for informational purposes only and are not intended to be used as a complete source of information on any particular company.  An individual should never invest in the securities of any of the companies profiled based solely on information contained in our report.  Individuals should assume that all information contained in the report about profiled companies is not trustworthy unless verified by their own independent research.

Any individual who chooses to invest in any securities should do so with caution.  Investing in securities is speculative and carries a high degree of risk; you may lose some or all of the money that is invested.  Always research your own investments and consult with a registered investment advisor or licensed stock broker before investing.

Information contained in our report will contain “forward looking statements” as defined under Section 27A of the Securities Act of 1933 and Section 21B of the Securities Exchange Act of 1934.  Subscribers are cautioned not to place undue reliance upon these forward looking statements.  These forward looking statements are subject to a number of known and unknown risks and uncertainties outside of our control that could cause actual operations or results to differ materially from those anticipated.  Factors that could affect performance include, but are not limited to, those factors that are discussed in each profiled company’s most recent reports or registration statements filed with the SEC.  You should consider these factors in evaluating the forward looking statements included in the report and not place undue reliance upon such statements.

We are committed to providing factual information on the companies that are profiled.  However, we do not provide any assurance as to the accuracy or completeness of the information provided, including information regarding a profiled company’s plans or ability to effect any planned or proposed actions.  We have no first-hand knowledge of any profiled company’s operations and therefore cannot comment on their capabilities, intent, resources, nor experience and we make no attempt to do so.  Statistical information, dollar amounts, and market size data was provided by the subject company and related sources which we believe to be reliable.

To the fullest extent of the law, we will not be liable to any person or entity for the quality, accuracy, completeness, reliability, or timeliness of the information provided in the report, or for any direct, indirect, consequential, incidental, special or punitive damages that may arise out of the use of information we provide to any person or entity (including, but not limited to, lost profits, loss of opportunities, trading losses, and damages that may result from any inaccuracy or incompleteness of this information).

We encourage you to invest carefully and read investment information available at the websites of the SEC at http://www.sec.gov and FINRA at http://www.finra.org.

Related Articles

1. Stock Alert for DryShips Inc. (DRYS)
2. Stock Alert for Omega Navigation Enterprises Inc. (ONAV)
3. Stock Alert for Sino Clean Energy Inc. (SCEI)

The Company was founded in 2004 and is based in Athens, Greece.

Source: Reuters.com, SEC Filings.

Investment Highlights

On average, analysts expect DRYS to report fourth-quarter earnings 25 cents per share and revenue of $222 million, which is ahead of last year’s figure of $193.46 million. In the previous quarter, the Company posted adjusted earnings of 38 cents per share on revenue of $225.5 million.  Analysts had predicted earnings and revenue estimates of 25 cents share and $216.92 million in sales, respectively.

As previously reported, DRYS had solid operating results in the third quarter of 2010. “The strategic decision to fix out our drybulk fleet has paid off as our time-chartered fleet continues to outperform the spot market,” DRYS CEO George Economou said in a statement.

According to Economou, about 80% of the Company’s shipdays in 2011 has been fixed out at a daily rate of $37,000 and the Company believes it will outperform the spot market again this year. On the ultra deepwater drilling business, two semisubmersibles continue to perform at high utilization rates on highly profitable contracts.

“The ultra deepwater market has turned a corner in the last couple of months and we believe that current enquiry from operators matches or may even exceed the supply available in 2011. This is even before the full impact of the unfolding regulations in the Gulf of Mexico are felt by the older rigs operating in the region.  Asset prices for ultra deepwater rigs with early delivery have strengthened considerably as a result of strong interest to purchase new assets from several drillers,” the Company stated.

Early this year, DRYS announced that its subsidiary Ocean Rig UDW signed two contracts worth $237 million with Cairn Energy for drillships “Leiv Eiriksson” and “Ocean Rig Corcovado” for a period of about six months each. The total contract value for the Leiv Eiriksson is approximately $95 million, including mobilization.  The total contract value of the Ocean Rig Corcovado is about $142 million, including mobilization and winterization.

DRYS also announced that Ocean Rig UDW signed a drilling contract for its third drillship newbuilding Ocean Rig Poseidon. As part of this agreement, the Leiv Eiriksson will be released early from the existing contract and will be made available in the second quarter of this year. The firm contract period is for about 600 days plus a mobilization period. The total contract value including mobilization is $353 million.

DRYS dropped 4 cents, or 0.71%, Tuesday to close at $4.87 per share. About 5.10 million shares have traded hands during the session, versus the average daily volume of 18.82 million. The stock has been moving within a range of $3.28 – $6.82 over the past 52-weeks. The stock is currently trading below its 50-day and 200-day moving averages of $4.99 and $4.92, respectively. Market capitalization currently stands at $1.51 billion and it has 310.31 million outstanding shares.

Visit DRYS at www.dryships.com

Financial Summary

For the third quarter of 2010, DRYS reported net income of $49.3 million, or $0.18 basic and diluted earnings per share, for the three-month period ended September 30, 2010, as compared to a net income of $31.4 million, or $0.11 basic and diluted earnings per share, for the three-month period ended September 30, 2009. Adjusted EBITDA was $168.1 million for the third quarter of 2010 as compared to $139.9 million for the same period in 2009.

Included in the third quarter 2010 results are various items totaling $49.7 million, or $0.2 per share.  Excluding these items, the Company’s adjusted net income would have amounted to $99.0 million, or $0.38 per share.

Basic earnings per share for the third quarter of 2010 includes a non-cash accrual for the cumulative payment-in-kind dividends on the Series A Convertible Preferred Stock, amounting to $3.4 million, which reduces the income available to common shareholders.

For the drybulk carrier segment, net voyage revenues (voyage revenues minus voyage expenses) decreased by $6.7 million to $108.1 million for the three-month period ended September 30, 2010, as compared to $114.8 million for the three-month period ended September 30, 2009. For the offshore drilling segment, revenues from drilling contracts increased by $8.7 million to $110.4 million for the three-month period ended September 30, 2010, as compared to $101.7 million for the same period in 2009.

Total vessel and rig operating expenses and total depreciation and amortization decreased to $43.5 million and $48.5 million, respectively, for the three-month period ended September 30, 2010, from $54.5 million and $49.4 million, respectively, for the three-month period ended September 30, 2009. Total general and administrative expenses declined to $18.0 million in the third quarter of 2010 from $22.9 million during the comparative period in 2009.

Interest and finance costs, net of interest income, increased at $18.4 million for the three-month period ended September 30, 2010, compared to $16.3 million for the three-month period ended September 30, 2009.

Source: http://www.dryships.com

Source: Reuters.com, SEC Filings.

Analyst Consensus

This is the consensus forecast among 18 polled investment analysts. Against the DryShips Inc company.

The 15 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 22.45% increase from the last price of 4.90.

Source: markets.ft.com

Consensus Estimates Analysis

Source: http://www.reuters.com/finance/stocks/financialHighlights?symbol=DRYS.O

Technical Analysis

Source: http://stockcharts.com

On Friday last week, DRYS closed below its 20-day moving average. This is generally considered to be an indication of a bearish trend.

DRYS has been relatively stable recently. This is evidenced by the width of its Bollinger Bands which are tighter than normal. Additionally, DRYS is trading within its Bollinger Bands. This is a normal condition and suggests that the stock is neither overbought nor oversold relative to the recent price action.

DRYS’s MACD is currently indicating a weak bullish signal. Although the MACD is trending above the signal line, the indicator is still below 0, which suggests that the underlying moving averages are bearish.

Comparative Analysis

Source: Thomson Financial

Source: Yahoo Finance

DO NOT BASE ANY INVESTMENT DECISION UPON ANY MATERIALS FOUND ON THIS REPORT. We are not registered as a securities broker-dealer or an investment adviser either with the U.S. Securities and Exchange Commission (the “SEC”) or with any state securities regulatory authority.  We are neither licensed nor qualified to provide investment advice.

The information contained in our report should be viewed as commercial advertisement and is not intended to be investment advice.  The report is not provided to any particular individual with a view toward their individual circumstances. The information contained in our report is not an offer to buy or sell securities.  We distribute opinions, comments and information free of charge exclusively to individuals who wish to receive them.

Our newsletter and website have been prepared for informational purposes only and are not intended to be used as a complete source of information on any particular company.  An individual should never invest in the securities of any of the companies profiled based solely on information contained in our report.  Individuals should assume that all information contained in the report about profiled companies is not trustworthy unless verified by their own independent research.

Any individual who chooses to invest in any securities should do so with caution.  Investing in securities is speculative and carries a high degree of risk; you may lose some or all of the money that is invested.  Always research your own investments and consult with a registered investment advisor or licensed stock broker before investing.

Information contained in our report will contain “forward looking statements” as defined under Section 27A of the Securities Act of 1933 and Section 21B of the Securities Exchange Act of 1934.  Subscribers are cautioned not to place undue reliance upon these forward looking statements.  These forward looking statements are subject to a number of known and unknown risks and uncertainties outside of our control that could cause actual operations or results to differ materially from those anticipated.  Factors that could affect performance include, but are not limited to, those factors that are discussed in each profiled company’s most recent reports or registration statements filed with the SEC.  You should consider these factors in evaluating the forward looking statements included in the report and not place undue reliance upon such statements.

We are committed to providing factual information on the companies that are profiled.  However, we do not provide any assurance as to the accuracy or completeness of the information provided, including information regarding a profiled company’s plans or ability to effect any planned or proposed actions.  We have no first-hand knowledge of any profiled company’s operations and therefore cannot comment on their capabilities, intent, resources, nor experience and we make no attempt to do so.  Statistical information, dollar amounts, and market size data was provided by the subject company and related sources which we believe to be reliable.

To the fullest extent of the law, we will not be liable to any person or entity for the quality, accuracy, completeness, reliability, or timeliness of the information provided in the report, or for any direct, indirect, consequential, incidental, special or punitive damages that may arise out of the use of information we provide to any person or entity (including, but not limited to, lost profits, loss of opportunities, trading losses, and damages that may result from any inaccuracy or incompleteness of this information).

We encourage you to invest carefully and read investment information available at the websites of the SEC at http://www.sec.gov and FINRA at http://www.finra.org.

Related Articles

1. Stock Alert for DryShips Inc. (DRYS)
2. Stock Alert for DryShips Inc (NASDAQ: DRYS)
3. DryShips Inc. (DRYS)

The Company was founded in 2004 and is based in Athens, Greece.

Source: Reuters.com, SEC Filings.

Financial Summary

For the third quarter of 2010, DRYS reported net income of $49.3 million, or $0.18 basic and diluted earnings per share, for the three-month period ended September 30, 2010, as compared to a net income of $31.4 million, or $0.11 basic and diluted earnings per share, for the three-month period ended September 30, 2009. Adjusted EBITDA was $168.1 million for the third quarter of 2010 as compared to $139.9 million for the same period in 2009.

Included in the third quarter 2010 results are various items totaling $49.7 million, or $0.2 per share.  Excluding these items, the Company’s adjusted net income would have amounted to $99.0 million, or $0.38 per share.

Basic earnings per share for the third quarter of 2010 includes a non-cash accrual for the cumulative payment-in-kind dividends on the Series A Convertible Preferred Stock, amounting to $3.4 million, which reduces the income available to common shareholders.

For the drybulk carrier segment, net voyage revenues (voyage revenues minus voyage expenses) decreased by $6.7 million to $108.1 million for the three-month period ended September 30, 2010, as compared to $114.8 million for the three-month period ended September 30, 2009. For the offshore drilling segment, revenues from drilling contracts increased by $8.7 million to $110.4 million for the three-month period ended September 30, 2010 as compared to $101.7 million for the same period in 2009.

Total vessel and rig operating expenses and total depreciation and amortization decreased to $43.5 million and $48.5 million, respectively, for the three-month period ended September 30, 2010, from $54.5 million and $49.4 million, respectively, for the three-month period ended September 30, 2009. Total general and administrative expenses declined to $18.0 million in the third quarter of 2010 from $22.9 million during the comparative period in 2009.

Interest and finance costs, net of interest income, increased at $18.4 million for the three-month period ended September 30, 2010, compared to $16.3 million for the three-month period ended September 30, 2009.

Source: http://www.dryships.com

Source: Reuters.com, SEC Filings.

Analyst Consensus

This is the consensus forecast among 18 polled investment analysts. Against the DryShips Inc company.

The 14 analysts offering 12-month price targets for DRYS have a median target of 6.05, with a high estimate of 9.00 and a low estimate of 4.00. The median estimate represents a 16.57% increase from the last price of 5.19.

Source: markets.ft.com

Consensus Estimates Analysis

Source: http://www.reuters.com/finance/stocks/financialHighlights?symbol=DRYS.O

Investment Highlights

DRYS specializes in the transportation of drybulk cargoes. Its vessels are able to trade worldwide in a multitude of trade routes carrying a wide range of cargoes for a number of industries.

The Company’s Capesize and Panamax drybulk carriers carry predominantly coal and iron ore for energy and steel production as well as grain for feedstocks. Its Handymax and Handysize drybulk carriers carry iron and steel products, fertilizers, minerals, forest products, ores, bauxite, alumina, cement and other construction materials. These raw materials and products are used as production inputs in a number of industries. The Company’s fleet carrying capacity totals over 3.4 million deadweight tons.

Late last month, DRYS entered into agreements with a first-class Korean shipyard to purchase 12 high-specification newbuilding tankers at a total purchase price of about $770 million. The Company said it intends to position its tanker investments for a spinoff or initial public offering this year.

“The tanker acquisition and eventual spin-off or public offering is the next step in the evolution of the company,” DRYS CEO George Economou said in a statement.

Recent Company News

The Company on Tuesday announced its Ocean Rig UDW subsidiary received contracts worth a combined $495 million for two rigs from Cairn Energy.

DRYS CEO George Economou commented on the news: “We were able to offer the customer a package solution due to the highly specialized nature of our semi-submersibles and also the state of the art drillships. Following the signing of these contracts we are only left with one open drillship, the Ocean Rig Mykonos, that delivers in the fourth quarter of 2011. We are working to secure employment for the Mykonos and also to further increase the contract backlog. Demand for our units has improved significantly and we hope to announce further contracts in the near future.”

The Company said the six-month contracts for Leiv Eiriksson and Ocean Rig Corcovado include consideration for mobilization and winterization. Leiv Eiriksson, currently contracted to Petrobras, has a contact value of approximately $95 million, while Ocean Rig Corcovado’s is approximately $142 million.

In a separate announcement, the Company also said Ocean Rig has signed a drilling contract with Petrobras

Tanzania for Ocean Rig Poseidon. The said rig has been contracted for a period of about 600 days, plus a mobilization period, for $353 million.  As part of the deal, the Leiv Eiriksson will be released early from the existing contract and will be made available in the second quarter of this year.

Source: reuters.com; http://www.dryships.com

Technical Analysis

Source: http://stockcharts.com

DRYS is below its 13-day moving average. This bearish sign is even more significant because the moving average is also trending lower.

DRYS is trading near its lower Bollinger Band. This suggests that the stock price is low relative to its recent price 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

Source: Thomson Financial

Insider Trading Activity

Source: Yahoo Finance

DO NOT BASE ANY INVESTMENT DECISION UPON ANY MATERIALS FOUND ON THIS REPORT. We are not registered as a securities broker-dealer or an investment adviser either with the U.S. Securities and Exchange Commission (the “SEC”) or with any state securities regulatory authority.  We are neither licensed nor qualified to provide investment advice.

The information contained in our report should be viewed as commercial advertisement and is not intended to be investment advice.  The report is not provided to any particular individual with a view toward their individual circumstances. The information contained in our report is not an offer to buy or sell securities.  We distribute opinions, comments and information free of charge exclusively to individuals who wish to receive them.

Our newsletter and website have been prepared for informational purposes only and are not intended to be used as a complete source of information on any particular company.  An individual should never invest in the securities of any of the companies profiled based solely on information contained in our report.  Individuals should assume that all information contained in the report about profiled companies is not trustworthy unless verified by their own independent research.

Any individual who chooses to invest in any securities should do so with caution.  Investing in securities is speculative and carries a high degree of risk; you may lose some or all of the money that is invested.  Always research your own investments and consult with a registered investment advisor or licensed stock broker before investing.

Information contained in our report will contain “forward looking statements” as defined under Section 27A of the Securities Act of 1933 and Section 21B of the Securities Exchange Act of 1934.  Subscribers are cautioned not to place undue reliance upon these forward looking statements.  These forward looking statements are subject to a number of known and unknown risks and uncertainties outside of our control that could cause actual operations or results to differ materially from those anticipated.  Factors that could affect performance include, but are not limited to, those factors that are discussed in each profiled company’s most recent reports or registration statements filed with the SEC.  You should consider these factors in evaluating the forward looking statements included in the report and not place undue reliance upon such statements.

We are committed to providing factual information on the companies that are profiled.  However, we do not provide any assurance as to the accuracy or completeness of the information provided, including information regarding a profiled company’s plans or ability to effect any planned or proposed actions.  We have no first-hand knowledge of any profiled company’s operations and therefore cannot comment on their capabilities, intent, resources, nor experience and we make no attempt to do so.  Statistical information, dollar amounts, and market size data was provided by the subject company and related sources which we believe to be reliable.

To the fullest extent of the law, we will not be liable to any person or entity for the quality, accuracy, completeness, reliability, or timeliness of the information provided in the report, or for any direct, indirect, consequential, incidental, special or punitive damages that may arise out of the use of information we provide to any person or entity (including, but not limited to, lost profits, loss of opportunities, trading losses, and damages that may result from any inaccuracy or incompleteness of this information).

We encourage you to invest carefully and read investment information available at the websites of the SEC at http://www.sec.gov and FINRA at http://www.finra.org.

Related Articles

1. Stock Alert for DryShips Inc. (DRYS)
2. Stock Alert for DryShips Inc (NASDAQ: DRYS)
3. Stock Alert for DryShips Inc. (DRYS)

DryShips is an owner and operator of drybulk carriers and offshore oil deep water drilling units that operate worldwide. The company owns a fleet of 39 drybulk carriers (including newbuildings), comprising of 7 Capesize, 30 Panamaxand and 2 Supramax, with a combined deadweight tonnage of more than 3.5 million tons and 6 offshore oil deep water drilling units, comprising of 2 ultra deep water semisubmersible drilling rigs and 4 ultra deep water newbuilding drillships.

The company started out as a drybulk shipper and entered the deepwater drilling business in 2008. The decision proved to be successful, given the oversupply of ships that deteriorated freight rates for drybulk shipping.  More interesting, the company generates about half of their revenue from 39 drybulk carriers, and the other half from 6 deep water offshore drilling rigs that it leases out.

DryShips’ revenue for Q2 2010 increased 8% to $224.2 million. The company recorded net income of $8.7 million, or $0.02 basic and diluted earnings per share, for Q2 2010, as compared to a net income of $51.5 million, or $0.24 basic and diluted earnings per share, for Q2 2009. Adjusted EBITDA was $152.3 million for the second quarter of 2010 as compared to $74.2 million for the same period in 2009.

In October, DryShips announced that its fully owned subsidiary Ocean Rig UDW Inc. has signed contracts with subsidiaries of Vanco Overseas Energy Limited for projects in which Vanco is operator and LUKOIL Overseas is majority co-venturer, for a five well contract for exploration drilling offshore Ghana and Cote d’Ivoire for a period of about one year with one drillship, commencing in the second quarter of 2011. The value of the contracts is approximately $160 million. DRYS has the option to use either OceanRig Corcovado or the OceanRig Olympia. The contract may be extended for an additional year or an additional well, prior to the completion of operations on the second well in the program.

The above contract was followed by a second announcement in November that DryShips’ subsidiary Ocean Rig UDW Inc. has received a Letter of Intent for the Eirik Raude from a British exploration company. The Letter of Intent is for a two well contract for exploration drilling offshore the Falkland Islands for a period of about 90 days, commencing in the fourth quarter of 2011, immediately after the completion of the current contract. The contract value is approximately $77 million. There are three further optional wells that could extend the contract by 135 days.

While the company is still burdened by a huge amount of debt closing to $3 billion, the exposure to the deepwater drilling operations positions DryShips better for a rapid recovery among its dry bulk shipping peers. The recovering demand for oil has already translated into a surge in deepwater drilling activities that are expected to push upward the drilling rates, resulting in stronger cash flows to DryShips.

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The Company was founded in 2004 and is based in Athens, Greece.

Source: Reuters.com, SEC Filings.

Financial Summary

For the second quarter of 2010, the Company reported net income of $8.7 million, or $0.02 basic and diluted earnings per share. Included in the second-quarter 2010 results are various items, totaling $71.7 million, or $0.28 per share. Excluding these items, net income amounted to $80.4 million or $0.30 per share. Included in the second-quarter 2010 results are non-cash amortization of debt issuance costs, including those relating to DRYS’ convertible senior notes, totaling $7.9 million, or $0.03 per share. Included in the second-quarter 2010 results are losses incurred on interest rate swaps, amounting to $63.8 million, or $0.25 per share.

Basic earnings per share for the second quarter of 2010 includes a non-cash accrual for the cumulative payment-in-kind dividends on the Series A Convertible Preferred Stock, amounting to $2.5 million, which reduces the income available to common shareholders.

The Company reported adjusted EBITDA of $152.3 million for the second quarter of 2010 as compared to $74.2 million in the same period in 2009. For the first half of 2010 adjusted EBITDA rose to $268.8 million compared to $24.5 million in the first half of 2009.

The Company recorded net income of $8.7 million, or $0.02 basic and diluted earnings per share, for the three-month period ended June 30, 2010, as compared to a net income of $51.5 million, or $0.24 basic and diluted earnings per share, for the three-month period ended June 30, 2009. Adjusted EBITDA was $152.3 million for the second quarter of 2010 as compared to $74.2 million for the same period in 2009.

Included in the second-quarter 2010 results are various items totaling $71.7 million, or $0.28 per share. Excluding these items, DRYS’ adjusted net income amounts to $80.4 million, or $0.30 per share.

Basic earnings per share for the second quarter of 2010 includes a non-cash accrual for the cumulative payment-in-kind dividends on the Series A Convertible Preferred Stock, amounting to $2.5 million, which reduces the income available to common shareholders.

For the drybulk carrier segment, net voyage revenues (voyage revenues minus voyage expenses) increased by $8.9 million to $108.8 million for the three-month period ended June 30, 2010, as compared to $99.9 million for the three-month period ended June 30, 2009. For the offshore drilling segment, revenues from drilling contracts amounted to $109.0 million for the three-month period ended June 30, 2010, as compared to $100.6 million for the same period in 2009.

Total vessel and rig operating expenses and total depreciation and amortization decreased to $46.7 million and $48.3 million, respectively, for the three-month period ended June 30, 2010, from $51.4 million and $48.7 million, respectively, for the three-month period ended June 30, 2009. Total general and administrative expenses declined to $16.8 million in the second quarter of 2010 from $21.9 million during the comparative period in 2009.

Interest and finance costs, net of interest income, was relatively stable at $24.1 million for the three-month period ended June 30, 2010, compared to $22.1 million for the three-month period ended June 30, 2009.

Source: Reuters.com, SEC Filings.

Analyst Consensus

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

The 14 analysts offering 12-month price targets for DRYS have a median target of 5.75, with a high estimate of 8.00 and a low estimate of 4.00. The median estimate represents a 38.55% increase from the last price of 4.15.

Source: markets.ft.com

Consensus Estimates Analysis

Source: http://www.reuters.com/finance/stocks/financialHighlights?symbol=DRYS.O

Investment Highlights

DRYS last month said it has signed an exploration-drilling deal with Vanco Overseas Energy Ltd. worth about $160 million. The Company said the contract may be extended for an extra year or include an additional well, prior to completion of operations on the second well.

George Economou, chairman, president and CEO of DRYS said: “We are pleased to have concluded the contract for one of the first two drillships that will deliver from Samsung in the first quarter of 2011. The option of using the first or the second drillship allows us to service the requirements of the customer and gives us flexibility considering the other tenders we are working on. This contract opens a new relationship for OceanRig with International operators who have strong potential in the ultra deepwater space and have drilling programs well beyond this first commitment. Moreover, this contract builds on the platform we have nurtured in Ghana. Ghana is emerging as a new oil province in West Africa with potential that could match Angola in the years to come. Our highly capable and unique semi-submersible drilling rig, the Eirik Raude, has been drilling offshore Ghana on contract to Tullow Oil for almost two years now. The experience gained over this period and the economies of scale with two rigs in adjacent areas will benefit OceanRig and position us for further business in this region. We are proud to be part of the growth story of Ghana.”

Earlier in October, the Company announced an initial four-well contract for exploration drilling offshore West Africa for a period of about 300 days, commencing in the first or second quarter of 2011. The contract was valued at around $135 million.

Investors welcomed the news as positive – at a time when DRYS is facing a massive debt overhang.  Bedfordreport.com said the Company “burned through more than half of their $1 billion in cash this year and remain with about the same amount of short and long term debt totaling close to $3 billion.”

DRYS’s Q3 earnings announcement is expected November 10, 2010.

Technical Analysis

Source: http://stockcharts.com

DRYS is below its 13- day moving average. This bearish sign is even more significant because the moving average is also trending lower.

DRYS is trading within its Bollinger Bands. This is a normal condition and suggests that the stock is neither overbought nor oversold relative to the recent price 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.

The RSI is currently at 43.17% which indicates that the stock is neither overbought nor oversold.

Comparative Analysis

Source: Thomson Financial

Insider Trading Activity

Source: Yahoo Finance

DO NOT BASE ANY INVESTMENT DECISION UPON ANY MATERIALS FOUND ON THIS REPORT. We are not registered as a securities broker-dealer or an investment adviser either with the U.S. Securities and Exchange Commission (the “SEC”) or with any state securities regulatory authority.  We are neither licensed nor qualified to provide investment advice.

The information contained in our report should be viewed as commercial advertisement and is not intended to be investment advice.  The report is not provided to any particular individual with a view toward their individual circumstances. The information contained in our report is not an offer to buy or sell securities.  We distribute opinions, comments and information free of charge exclusively to individuals who wish to receive them.

Our newsletter and website have been prepared for informational purposes only and are not intended to be used as a complete source of information on any particular company.  An individual should never invest in the securities of any of the companies profiled based solely on information contained in our report.  Individuals should assume that all information contained in the report about profiled companies is not trustworthy unless verified by their own independent research.

Any individual who chooses to invest in any securities should do so with caution.  Investing in securities is speculative and carries a high degree of risk; you may lose some or all of the money that is invested.  Always research your own investments and consult with a registered investment advisor or licensed stock broker before investing.

Information contained in our report will contain “forward looking statements” as defined under Section 27A of the Securities Act of 1933 and Section 21B of the Securities Exchange Act of 1934.  Subscribers are cautioned not to place undue reliance upon these forward looking statements.  These forward looking statements are subject to a number of known and unknown risks and uncertainties outside of our control that could cause actual operations or results to differ materially from those anticipated.  Factors that could affect performance include, but are not limited to, those factors that are discussed in each profiled company’s most recent reports or registration statements filed with the SEC.  You should consider these factors in evaluating the forward looking statements included in the report and not place undue reliance upon such statements.

We are committed to providing factual information on the companies that are profiled.  However, we do not provide any assurance as to the accuracy or completeness of the information provided, including information regarding a profiled company’s plans or ability to effect any planned or proposed actions.  We have no first-hand knowledge of any profiled company’s operations and therefore cannot comment on their capabilities, intent, resources, nor experience and we make no attempt to do so.  Statistical information, dollar amounts, and market size data was provided by the subject company and related sources which we believe to be reliable.

To the fullest extent of the law, we will not be liable to any person or entity for the quality, accuracy, completeness, reliability, or timeliness of the information provided in the report, or for any direct, indirect, consequential, incidental, special or punitive damages that may arise out of the use of information we provide to any person or entity (including, but not limited to, lost profits, loss of opportunities, trading losses, and damages that may result from any inaccuracy or incompleteness of this information).

We encourage you to invest carefully and read investment information available at the websites of the SEC at http://www.sec.gov and FINRA at http://www.finra.org.

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The Company was founded in 2004 and is based in Athens, Greece.

Source: Reuters.com, SEC Filings.

Financial Summary

Second-Quarter 2010 Financial Highlights

• For the second quarter of 2010, the Company reported net income of $8.7 million, or $0.02 basic and diluted earnings per share. Included in the second-quarter 2010 results are various items, totaling $71.7 million, or $0.28 per share. Excluding these items, net income amounted to $80.4 million or $0.30 per share. Included in the second-quarter 2010 results are non-cash amortization of debt issuance costs, including those relating to DRYS’ convertible senior notes, totaling $7.9 million, or $0.03 per share. Included in the second-quarter 2010 results are losses incurred on interest rate swaps, amounting to $63.8 million, or $0.25 per share.

• Basic earnings per share for the second quarter of 2010 includes a non-cash accrual for the cumulative payment-in-kind dividends on the Series A Convertible Preferred Stock, amounting to $2.5 million, which reduces the income available to common shareholders.

• The Company reported adjusted EBITDA of $152.3 million for the second quarter of 2010 as compared to $74.2 million in the same period in 2009. For the first half of 2010 adjusted EBITDA rose to $268.8 million compared to $24.5 million in the first half of 2009.

The Company recorded net income of $8.7 million, or $0.02 basic and diluted earnings per share, for the three-month period ended June 30, 2010, as compared to a net income of $51.5 million, or $0.24 basic and diluted earnings per share, for the three-month period ended June 30, 2009. Adjusted EBITDA was $152.3 million for the second quarter of 2010 as compared to $74.2 million for the same period in 2009.

Included in the second-quarter 2010 results are various items totaling $71.7 million, or $0.28 per share. Excluding these items, DRYS’ adjusted net income amounts to $80.4 million, or $0.30 per share.

Basic earnings per share for the second quarter of 2010 includes a non-cash accrual for the cumulative payment-in-kind dividends on the Series A Convertible Preferred Stock, amounting to $2.5 million, which reduces the income available to common shareholders.

For the drybulk carrier segment, net voyage revenues (voyage revenues minus voyage expenses) increased by $8.9 million to $108.8 million for the three-month period ended June 30, 2010, as compared to $99.9 million for the three-month period ended June 30, 2009. For the offshore drilling segment, revenues from drilling contracts amounted to $109.0 million for the three-month period ended June 30, 2010, as compared to $100.6 million for the same period in 2009.

Total vessel and rig operating expenses and total depreciation and amortization decreased to $46.7 million and $48.3 million, respectively, for the three-month period ended June 30, 2010, from $51.4 million and $48.7 million, respectively, for the three-month period ended June 30, 2009. Total general and administrative expenses declined to $16.8 million in the second quarter of 2010 from $21.9 million during the comparative period in 2009.

Interest and finance costs, net of interest income, was relatively stable at $24.1 million for the three-month period ended June 30, 2010, compared to $22.1 million for the three-month period ended June 30, 2009.

Source: Reuters.com, SEC Filings.

Analyst Consensus

This is the consensus forecast among 18 polled investment analysts. Against the DryShips Inc company.

The 14 analysts offering 12-month price targets for DRYS have a median target of 5.75, with a high estimate of 8.00 and a low estimate of 4.00. The median estimate represents a 19.05% increase from the last price of 4.83.

Source: www.ft.com

Consensus Estimates Analysis

Source: http://www.reuters.com/finance/stocks/financialHighlights?symbol=DRYS.O

Investment Highlights

DRYS recently announced that its fully owned subsidiary Ocean Rig UDW Inc. has received a Letter of Award from an American exploration company for a four-well contract for exploration drilling offshore West Africa for a period of about 300 days, commencing in the first or second quarter of 2011. The contract value is approximately USD $135 million. The contract is subject to final documentation.

George Economou, chairman and CEO of DRYS and interim CEO of Ocean Rig UDW Inc., said, “We are pleased to secure employment for one of our first two drillships that will be delivered from Samsung during the first quarter 2011. This will serve as a catalyst to securing bank financing on preferred terms. We continue to see strong interest for our state of the art sixth generation drillships operated by our experienced ultra-deepwater operator Ocean Rig.”

DRYS announced the results of its 2010 Annual Meeting of Shareholders (the “Meeting”). The following proposals were approved and adopted at the Meeting:

• The election of Ms. Chryssoula Kandylidis and Mr. George Demathas as Class C directors of the Company to serve until the 2013 Annual Meeting of Shareholders; and

• The ratification of the appointment of Ernst & Young (Hellas) Certified Auditors Accountants S.A., as the Company’s independent auditors for the fiscal year ending December 31, 2010.

DRYS recently announced that it has executed two supplemental agreements under its Senior and Junior Loan Facilities with HSH Nordbank AG, as agent, with an aggregate outstanding balance of $520.9 million as of September 29, 2010. As a result of the amendments in these new supplemental agreements, the Company will be, as of October 1, 2010, in full compliance with all its financial and non-financial covenants under the original facilities, as subsequently amended. Furthermore, effective October 1, 2010, the margin under these facilities will revert back from the higher margins during the waiver period to lower pricing.

Economou said, “We are pleased to report that DryShips is now in compliance with the original loan covenants on a major portion of the outstanding debt on the drybulk fleet. It has been two years since the collapse of Lehman that led to an unprecedented crisis in the shipping industry. Our strategy of fixed rate charters in both drybulk and offshore combined with longstanding relationships with the banks has led to a substantial improvement in the Company’s balance sheet.”

Source: http://www.dryships.com

Technical Analysis

Source: http://stockcharts.com

DRYS is trading above its 13-day moving average. This is considered to be the sign of a bullish trend. There is added weight to this indication because the moving average is rising and suggests that there has been buying interest in this stock.

DRYS is trading above its upper Bollinger Band. Relative to recent price action, the stock is currently overextended and due for either a pause or retracement.

The MACD for DRYS currently indicates a strong bullish signal for two reasons. First, the MACD is above the signal line, a 9-day moving average. Second, the MACD is above zero, which implies that the underlying moving averages are trending higher.

Comparative Analysis

Source: Thomson Financial

Insider Trading Activity

Source: Yahoo Finance

DO NOT BASE ANY INVESTMENT DECISION UPON ANY MATERIALS FOUND ON THIS REPORT. We are not registered as a securities broker-dealer or an investment adviser either with the U.S. Securities and Exchange Commission (the “SEC”) or with any state securities regulatory authority.  We are neither licensed nor qualified to provide investment advice.

The information contained in our report should be viewed as commercial advertisement and is not intended to be investment advice.  The report is not provided to any particular individual with a view toward their individual circumstances. The information contained in our report is not an offer to buy or sell securities.  We distribute opinions, comments and information free of charge exclusively to individuals who wish to receive them.

Our newsletter and website have been prepared for informational purposes only and are not intended to be used as a complete source of information on any particular company.  An individual should never invest in the securities of any of the companies profiled based solely on information contained in our report.  Individuals should assume that all information contained in the report about profiled companies is not trustworthy unless verified by their own independent research.

Any individual who chooses to invest in any securities should do so with caution.  Investing in securities is speculative and carries a high degree of risk; you may lose some or all of the money that is invested.  Always research your own investments and consult with a registered investment advisor or licensed stock broker before investing.

Information contained in our report will contain “forward looking statements” as defined under Section 27A of the Securities Act of 1933 and Section 21B of the Securities Exchange Act of 1934.  Subscribers are cautioned not to place undue reliance upon these forward looking statements.  These forward looking statements are subject to a number of known and unknown risks and uncertainties outside of our control that could cause actual operations or results to differ materially from those anticipated.  Factors that could affect performance include, but are not limited to, those factors that are discussed in each profiled company’s most recent reports or registration statements filed with the SEC.  You should consider these factors in evaluating the forward looking statements included in the report and not place undue reliance upon such statements.

We are committed to providing factual information on the companies that are profiled.  However, we do not provide any assurance as to the accuracy or completeness of the information provided, including information regarding a profiled company’s plans or ability to effect any planned or proposed actions.  We have no first-hand knowledge of any profiled company’s operations and therefore cannot comment on their capabilities, intent, resources, nor experience and we make no attempt to do so.  Statistical information, dollar amounts, and market size data was provided by the subject company and related sources which we believe to be reliable.

To the fullest extent of the law, we will not be liable to any person or entity for the quality, accuracy, completeness, reliability, or timeliness of the information provided in the report, or for any direct, indirect, consequential, incidental, special or punitive damages that may arise out of the use of information we provide to any person or entity (including, but not limited to, lost profits, loss of opportunities, trading losses, and damages that may result from any inaccuracy or incompleteness of this information).

We encourage you to invest carefully and read investment information available at the websites of the SEC at http://www.sec.gov and FINRA at http://www.finra.org.

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1. Stock Alert for DryShips Inc. (DRYS)
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I cannot claim to be an expert in this arena….I do not understand capacity, loads, fleet issues, etc….  I do believe that through a massive financing undertaken last year, OCNF has the financial capital to work its way through this market downturn.  The company showed only a small operating loss last Q.  Most of the large loss was due to non-recurring items (arbitrage gains, loss of sale of ships, etc…)

The chart is what caught my eye initially…. A trader buddy of mine had mentioned the company to me and when I checked it out I liked what I saw.  Here is the chart and you might see what I am seeing.

The first thing that stands out to me is the volatility of the stock….”if it goes up, look for it to come down.  If it goes down, look for it to go up”.  The latest slide has been precipitous, but there are signs that it could be reversing.  First, the stochastics indicate that it is oversold (a big upward pressure there).  The stock has reached a key support level at $1.25 and I wouldn’t be surprised if it bounced off that level.

I say this often, but as a recovering CPA, I really like fundamentals.  I mean the old-fashioned cash-in-bank, receiveables stuff.  OCNF has high debt which is usually the “kiss of death” in economic downturns, but it appears that the company has the liquidity to service its debt and, perhaps, come out stronger on the other side.  Their press releases paint a picture of a company whose fleet will be highly utilized into 2010…which is the key for a bulk shipping carrier.

With a management team that sounds like the traveling cast of Zorba the Greek (why are all shipping companies Greek-registered?), the company sounds like it might be around long enough to get noticed.  Keep it on your radar.  I don’t know how much farther it will fall, but be ready when this one turns.

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DO NOT BASE ANY INVESTMENT DECISION UPON ANY MATERIALS FOUND ON THIS REPORT. We are not registered as a securities broker-dealer or an investment adviser either with the U.S. Securities and Exchange Commission (the “SEC”) or with any state securities regulatory authority. We are neither licensed nor qualified to provide investment advice. Neither InvestorSoup.com nor its affiliates have a beneficial interest in the mentioned company; nor have they received compensation of any kind for any of the companies listed in this communication. The information contained in our report is not an offer to buy or sell securities. We distribute opinions, comments and information free of charge exclusively to individuals who wish to receive them.

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