DryShips Shares Plunged and Popped: What You Need to Know

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: Investors are jumping back on board DryShips (Nasdaq: DRYS  ) today after the company reported earnings.

So what: Net voyage revenues fell to $81.7 million from $106.7 million a year earlier, but the company's subsidiary Ocean Rig (Nasdaq: ORIG  ) made up the slack with revenues more than doubling to $237.7 million. The company reported a net loss of $6.2 million, or $0.02 per share. On an adjusted basis, the company made a profit of $0.07 per share, in line with estimates.

Now what: The trading action was very unusual today with shares dropping 10% and then rising 10% as the day went on. Dry bulk rates are still low, and I don't see a reason to buy DryShips after reporting another loss. If anything, Ocean Rig is more interesting since it has exposure to the exploding ultra-deepwater drilling market without the exposure to dry bulk shipping.

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

Fool contributor Travis Hoium does not have a position in any company mentioned. You can follow Travis on Twitter at @FlushDrawFool, check out his personal stock holdings or follow his CAPS picks at TMFFlushDraw.

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Read/Post Comments (2) | Recommend This Article (6)

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  • Report this Comment On February 23, 2012, at 5:40 PM, LouNg wrote:

    Ocean Rig is one factor (rising crude), but BDX is probably around the bottom. With DOW, S&P, Nasdaq are all at their high, US looks okay, China probably avoid hard landing and easings probably on the way, and EU seems okay at the moment, there's reason to be optimistic. A lot of uncertainty remains, US election politics, China shadow banking and housing bubble, Iran & N Korea, and yes EU firewall (what firewall? looking for Portugal, Spain, and Italy in the news again soon), it just take one event and we'll talk about 14% correction as Morgan Stanley floated today. May God bless the courageous investors!

  • Report this Comment On February 24, 2012, at 2:58 AM, harkvasa wrote:

    When U buy DRYS for $3.60; U R getting $4 worth of ORIG with it. So I think, It it morebeneficial to buy DRYS shares as U get 10% more of ORIG for the same money and then U get DRYS buls ship business for free.

    I think, DRYS will rise up to $7 per share in next 12 months. , ORIG will rise to $24 per share in next 12 months.

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Related Tickers

10/24/2016 10:17 AM
DRYS $0.36 Down +0.00 -0.30%
DryShips CAPS Rating: **
ORIG $0.91 Down -0.01 -1.04%
Ocean Rig UDW CAPS Rating: No stars