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DryShips Skids, Sears Stands Out in Stock Market Today

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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.

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Related Tickers

9/27/2016 4:45 PM
^DJI $18228.30 Up +133.47 +0.74%
DIS $91.72 Down -0.24 -0.26%
Walt Disney CAPS Rating: *****
DRYS $0.44 Down -0.03 -5.64%
DryShips CAPS Rating: **
SHLD $11.20 Up +0.21 +1.91%
Sears Holdings CAPS Rating: *