DryShips Skids, Sears Stands Out in Stock Market Today

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

This year brought its fair share of economic obstacles, each threatening to slow the post-crisis bull market, now nearly five years in the making. Congressional chaos, Federal Reserve fretting, insider trading scandals, and a still-reeling labor market gave investors plenty to worry about in 2013. But the health of corporate America continues to improve, and slowly but surely Main Street is getting back on its feet, too.

Those who could afford to invest in America's recovery were well rewarded in 2013 -- a year that may prove to be the best for the Dow Jones Industrial Average (DJINDICES: ^DJI  ) since 1996. The Dow added 25 points, or 0.2%, to end at 16,504, closing at an all-time high for the 51st time this year. 

Consumer services ended as the strongest sector in the markets Monday, a trend that Walt Disney (NYSE: DIS  ) was happy to go along with. Disney's stock surged 2.5%, leading all blue chips after Guggenheim Securities upgraded shares of the entertainment conglomerate from "hold" to "buy." Just because one Wall Street analyst is starting to see the value in an iconic brand -- with absurd amounts of intellectual property and the staying power of an Immovable Object -- doesn't mean you should get behind it. Believe in the stock because "it's a small world after all," and Disney remains one of the most imaginative companies in it. 

Unlike Disney, Sears Holdings (NASDAQ: SHLD  ) is a highly volatile, unprofitable, high-risk investment that doesn't pay a dividend. Sears also said earlier this month that it will spin off one of its (gasp!) financially successful subsidiaries, Lands' End, to raise capital for its core business. Sears has been throwing good money after bad since taking Kmart under its wing in 2005 -- it's now posted 27 straight quarters of falling sales. In the face of all this, the stock still somehow added 3.3% today. I tend to doubt this signals the beginning of a turnaround in its business trends. 

Lastly, Greek drybulk shipper DryShips (NASDAQ: DRYS  ) saw its stock fall 6.4%, although trends in its business have been very favorable in 2013. DryShips stock has gone bonkers this year, soaring 173% as the cost to ship materials surged. The company is also somewhat diversified, engaging in deepwater oil drilling through a subsidiary, Ocean Rig. Just a few weeks ago, Ocean Rig added a drillship to its fleet and immediately deployed it, which was good news for shareholders. While things have been looking up for DryShips, be cautious before investing here: The shipper is loaded down with a ton of debt that could impede its future growth.

The $2.2 trillion war for your living room begins now
Entertainment -- specifically television as we know it -- is on the verge of a transformation. The companies that prevail in this epic disruption could go on to earn their shareholders untold sums of money. And the companies that lose could very well end up in bankruptcy court within a matter of years. With this in mind, our top technology analysts created a groundbreaking free report that sorts out the likely winners from the losers. In doing so, they reveal the handful of companies that are best positioned to make their shareholders exceptionally rich over the next few decades. To download this invaluable free report before the rest of the market catches on, simply click here now.


Read/Post Comments (0) | Recommend This Article (1)

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 Report this Comment icon found on every comment.

Be the first one to comment on this article.

Sponsored Links

Leaked: Apple's Next Smart Device
(Warning, it may shock you)
The secret is out... experts are predicting 458 million of these types of devices will be sold per year. 1 hyper-growth company stands to rake in maximum profit - and it's NOT Apple. Show me Apple's new smart gizmo!

DocumentId: 2779750, ~/Articles/ArticleHandler.aspx, 10/24/2014 10:52:31 AM

Report This Comment

Use this area to report a comment that you believe is in violation of the community guidelines. Our team will review the entry and take any appropriate action.

Sending report...


Advertisement