October may be most remembered by investors for the two largest percentage drops in stock market history: the stock market crash of 1929 that ushered in the Great Depression and 1987's Black Monday, the single largest one-day decline ever recorded, a 22% plunge.
It's also been the month of some of the biggest moves higher, both percentage-wise and point-wise, but those, apparently, are less memorable. This October, though, a couple of stocks enjoyed their own memorable moves higher. TransEnterix (NYSEMKT:TRXC), and DryShips (NASDAQ:DRYS) are two of the biggest positive movers on the market this past month.
DryShips (up 58%)
Looking at a chart of shipping company Dryships over the past year, it might be hard to notice the jump in the stock price this month, but that's only if the chart failed to account for all of the reverse stock splits the shipping company has engineered as it sought to salvage its exchange listing.
Dryships has been a disaster. Over the past two years, it has initiated no fewer than eight reverse stock splits, five of which occurred this year and two of which occurred within a month of each other. It was trying to raise cash to rebuild its fleet and was issuing shares hand over fist to do so that.
Now it seems to have finally moved past those profligate ways and it may finally be able to reap the benefits of rising spot prices in its specialty dry bulk market. Forbes noted the Baltic Dry Index, which is a composite of the shipping rates realized by Capesize, Supramax, Handymax, and Panamax dry bulk shippers, hit its highest point in three-and-a-half years during October. Meanwhile, CEO George Economou made a big investment of his own money in the company and agreed not to sell the shares for at least six months, showing that the company's top management believes the worst is behind the company.
Might it be too little too late for Dryships though? The SEC is looking into how the company raised its capital, and shareholders have filed numerous lawsuits against the company. Having obliterated so much shareholder value over just the past year, this is a risky stock regardless of its shipping rates.
TransEnterix (up 90%)
Shares of newly commercial-stage robotic surgery specialist TransEnterix may be nearly twice as high as they were when they started the month, but they're also 32% below the peak they reached in October. The company had a huge boost mid-month when the FDA approved its Senhance Surgical Robotic System, which would allow it to compete directly against Intuitive Surgical and its daVinci robotic surgery machines.
Yet TransEnterix faces a lot of uncertainty, not least of which is being short on capital to finance its growth. That has many people believing it is ripe for a buyout by a bigger, better-financed medical device company. Also, Intuitive Surgical has a 17-year head start on the tiny rival, and Intuitive has years of proven reliability. Many hospitals have already invested in buying Intuitive's extremely expensive machines and training their staff on them. It would be no easy task for TransEnterix to strip much, if any, of the daVinci's market share from it.
TransEnterix' CEO, Todd M. Pope, seems to realize that as well and wanted to dampen enthusiasm that his company was ready to take on the industry titan. He said, "We feel like we have got a lot of open field running ahead of us. We are not going to be competing head-on with Intuitive." Moreover, TransEnterix's specialty is colorectal and gynecological surgery, not the urological or prostate indications that form Intuitive Surgical's area of expertise.