What happened

The price of dry bulk shipping services continues to erode, and this trend is doing a number on dry bulk shipping stocks today. In the face of major benchmarks being generally in the green, shares of Golden Ocean Group Limited (GOGL -0.78%) are down 5.9% as of 12:30 p.m. ET, Genco Shipping & Trading Limited (GNK -2.21%) has fallen 6%, and Eagle Bulk Shipping (EGLE) is down 6.7%.

Blame the continued erosion of the Baltic Exchange Dry Index, which has plunged by more than half from its mid-May high point of 3,369, sliding a further 5.1% today to hit 1,477, its lowest point since early February.  

So what

Not that you would know it from how these stocks have been performing lately, though! Two of today's three decliners -- Genco and Eagle Bulk Shipping -- have posted earnings in the past two weeks, and both reports were pretty great.

Genco reported on Aug. 3 that its Q2 sales rose 14% year over year and its profits jumped 47%. One day later, Eagle Bulk Shipping announced 53% growth in revenue, along with profits up 680%! (So clearly, there are degrees of greatness in the results, even within this industry.)      

Both companies sounded optimistic about the future as well, with Genco in particular boasting that it's paying down debt even as it pays out big dividends. Genco also assured investors that it has already "booked the majority of our available days at over $25,000 per day," locking in good rates for dry bulk shipping even if industrywide rates appear to be trending down on the Baltic Exchange Dry Index.

Now what

What may be of particular interest to long-term investors in this sector is Genco CEO John Wobensmith's observation that the "supply and demand balance" in dry bulk shipping remains attractive, while orders for new dry bulk ships from ship operators in the industry are "historically low." This, explains Wobensmith, "provides a low threshold for demand to exceed supply," implying that even if dry bulk shipping rates are trending down today, it wouldn't take much of a supply (or demand) shock to send rates shooting higher once again.

With that prospect in mind, and with Eagle Bulk Shipping stock selling for 2.6 times trailing earnings, Genco selling for three times earnings, and even Golden Ocean costing not much more at 3.5 times earnings, I'm loathe to call any of these stocks "overvalued" at present.

Dry bulk index or no dry bulk index, all these stocks still look very cheap to me.