DryShips' Shares Dropped: What You Need to Know (DRYS)

DryShips' Shares Dropped: What You Need to Know

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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 ) fell as much as 12.3% today on above-average trading volume.

So what: The company just released second-quarter results, showing revenue and adjusted earnings well below Street estimates. That said, the deep plunge was brief: Share prices quickly bounced back to a less terrifying 4% overnight swoon, and the stock has gained a market-beating 11% over the past week.

Now what: DryShips has never been a particularly shareholder-friendly company, with the ownership structure set up to benefit CEO George Economou more than regular shareholders. The ongoing process of spinning off oil-drilling subsidiary Ocean Rig UDW as a share dividend to stockholders might temper that image somewhat. But the company remains scary, and the shipping sector as a whole looks no better than the perennially troubled airline industry these days, and that includes higher-quality operators Diana Shipping (NYSE: DSX ) and Navios Maritime Holdings (NYSE: NM ) . How do you make a small fortune in shipping stocks? Start with a large one.

Interested in more info on DryShips? Add it to your watchlist.

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Fool contributor Anders Bylund holds no position in any of the companies discussed here. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool is investors writing for investors.

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