Historically, tumultuous times offer some of the best opportunities to buy stocks, and the market's current mess surely qualifies. The brutal conditions have changed the game in many industries, including the shipping sector, and the volatile conditions have actually given investors many reasons to consider buying shares of dry bulk carrier DryShips (Nasdaq: DRYS ) today.
In our Motley Fool CAPS community, 3,009 investors have given a bullish or bearish opinion on DryShips. Poring through the detailed information packed in pitches and other comments, I've dug up three of the top reasons why many members consider the stock a buy today:
1. Increased industry activity: Stalled contract negotiations between Chinese steel manufacturers and suppliers Rio Tinto (NYSE: RTP ) , Vale (NYSE: VALE ) , and BHP Billiton haven't completely shut off the importation of iron ore to China. Buyers have been turning to the spot markets and spurring a surge of iron ore and coal imports. The increased activity has sparked demand for dry bulk shippers and driven Capesize dry bulk rates to multiply over the past several months.
2. Cutting costs: DryShips has been working to improve its liquidity and financial position by cutting costs and furloughing around $2 billion in capital expenditures. And like competitors Excel Maritime Carriers (NYSE: EXM ) , Genco Shipping (NYSE: GNK ) , and TBS International (Nasdaq: TBSI ) , it's gotten some breathing room from its creditors by way of covenant waivers.
3. Profitable operations: Excluding special items in its most recent quarter, DryShips' operations pulled in more than $47 million in net profit, giving some investors confidence that once the volatile conditions settle down, DryShips should see smooth sailing. While competitor Navios Maritime Holdings (NYSE: NM ) beefs up its fleet, some CAPS members think DryShips' recent moves to improve its finances will help position it to benefit from what some see as a dry bulk recovery.
Of course, there's a lot more devil in the details of these buy-side opinions, which is why CAPS is such a great resource to check and balance your own analysis. You can read the bullish and bearish sides to every stock. To see what the very best CAPS members are saying now about DryShips, just click on over to Motley Fool CAPS and have a look -- it's all free, and your opinion's welcome, too.
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