Although we don't believe in timing the market or panicking over market movements, we do like to keep an eye on big changes -- just in case they're material to our investing thesis.

What: Shares of dry-bulk shipper DryShips (Nasdaq: DRYS) got hulled this morning, down 13% on news that the firm is proceeding with plans to partially spin off its "drillship" operation, known as Ocean Rig UDW.

So what: DryShips is characterizing the move as a way to "deliver substantial value to DryShips shareholders." The idea being that there's value in Ocean Rig that Mr. Market isn't recognizing, and that DryShips can unlock some of that value by breaking off part (about 2%) of its own ownership interest in Ocean Rig, and moving it directly into its shareholders' brokerage accounts. Investors selling the stock, however, seem more concerned that weak earnings at rival shippers like Genco (NYSE: GNK) and Excel Maritime (NYSE: EXM) may mean bad things for DryShips' core shipping business, too.

Now what: They're right to worry. While on the surface, DryShips stock looks cheap at less than 5 times "earnings," there's trouble brewing below the water line. Long-term growth estimates for the stock hover around 4%, which is kinda low for the price. Also, DryShips has continuing trouble generating free cash flow anything like the amounts of GAAP earnings it reports. In fact, at last report DryShips was again burning cash ...

Think DryShips is still ship-shape? Double-check your assumptions. Add DryShips to your Fool Watchlist, and see what's really going on.