DryShips Got Crushed: What You Need to Know (^DJI, DRYS)

DryShips Got Crushed: What You Need to Know

Watch stocks you care about

The single, easiest way to keep track of all the stocks that matter...

Your own personalized stock watchlist!

It's a 100% FREE Motley Fool service...

Click Here Now

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: Well, they did it. After today's initial steep sell-off, the Dow Jones Industrial Average (INDEX: ^DJI) -- and other indices as well -- somehow managed to end the day in the green. But not everyone's smiling. Shareholders of DryShips (Nasdaq: DRYS ) , for one, may have dodged a bullet after pulling out of their 17% dive but still ended the day with a loss.

So what: Why is DryShips the odd man out? Why is it ever? Just like yesterday, the company remains tarred by its reputation as a "Greek shipper." (Greece, as you may have heard, is having some problems lately.) And as fellow Fool Anders Bylund pointed out yesterday, DryShips' venture into oil drilling with its drillships program is also hurting, as oil prices continue to sink.

Now what: Two months ago, I warned investors that DryShips' earnings weren't all they were cracked up to be, inasmuch as they lacked free cash flow to back them up. Two months later, we see this reflected in a P/E that's doubled even as earnings keep falling. With the company still burning cash, and with no end in sight, I see little reason for investors to board the stock today. Stay away.

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

The Steve Jobs Betrayal
You may already know that in the final year of his life, Jobs revealed a stunning betrayal — and told his biographer, "I will spend my last dying breath... and every penny of Apple's $40 billion in the bank to right this wrong." What was it that made Jobs so irate — and why could it make a few in-the-know investors some major profits over the coming months and years?

Enter your email address below to find out what made Jobs so enraged!

Fool contributor Rich Smith does not own (or short) shares of any company named above. We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment icon found on every comment.

Report this Comment On October 05, 2011, at 1:55 PM, Cake123xyz wrote:

little reason? How about the fact that they're trading @ 1/4 of their book value? How about the fact that the ORIG spinoff allows for a source of liquidity in dire times?
If you find no value in a valuation play, you need to stop talking to the masses.
Report this Comment On October 12, 2011, at 11:30 PM, chopchop0 wrote:

@Cake123xyz
How about the fact that the CEO is corrupt and will throw shareholders under the bus any chance he gets?