Great Call on Toyota! What's Next?

It's been a rough ride for Toyota Motor (NYSE:TM) lately.

As if trying to get strapped consumers to buy cars during one of the worst global recessions in decades wasn't hard enough, now it's managing the recall and repair of millions of cars in the U.S., thanks to an accelerator issue that could put motorists at risk. While the company appears to be right on top of the issue, the cutthroat nature of the auto business means that a slip like this could be a good opportunity for Honda or Ford (NYSE:F) to swoop in on would-be Toyota customers.

On the Motley Fool CAPS community, members have been somewhat hesitant on Toyota's stock. Though 3,018 members have rated the stock an outperformer, enough bears have weighed in that the stock currently carries a three-star rating out of a possible five stars.

And, in fact, it's been the Toyota bears who have been winning out lately. Since the market's bottom last year, the company's stock has underperformed the market by a decent margin, and there have been more than a few CAPS members scoring points on that lackluster performance. CAPS member cwcj63, for instance, nabbed 23 points of market outperformance by putting a thumb down on Toyota's stock during March last year.

While this was a pretty timely pick, Toyota isn't this player's only great call. Here's a look at a few of the other prescient picks:

Data from CAPS.

So what has this investor been looking at more recently? Here are a few of the most recent calls on CAPS:

Data from CAPS.

While not all of these picks may pan out, they could be a good place to start further research. I decided to take a closer look at DryShips.

Will DryShips shiver your timbers?
DryShips has long been a stock that both fellow Fool writers and CAPS members have been skeptical of. Way back in September 2006, Foolish writer Stephen Ellis wrote the following of the company's questionable head honcho:

[DryShips'] CEO George Economou seems to have little concern about individual investors, as former Barron's editor Kathryn M. Welling pointed out in a newsletter column last year titled "The Golden Fleece?" "It was surreal," a source told Welling in relation to DryShips' IPO. "When someone asked why he was doing the deal, here-now, [Economou] actually said, basically, 'Because Americans are the dumbest investors around, and there's lots of liquidity in this market.'"

At that point, shares were trading at around $13.40 per share; since then, they saw a furious run all the way up to well over $100 per share before plunging down to $5.75, where they trade today.

But what do investors think now that the stock has been beaten down so far? CAPS members have a mixed view of DryShips. There have been more than 2,700 outperform ratings, but, like Toyota, enough bears have come on the scene that the stock currently sports just three stars.

And it's not hard for me to see where the bears are coming from. In addition to concerns over the company's management, DryShips has a good deal of debt -- $2.65 billion, or roughly 99% of the company's shareholder equity. And the only reason the company's debt-to-equity ratio isn't totally out of control is because of massive share offerings over the past couple of years.

Meanwhile, the last time that the company reported positive free cash flow was ... Well, since hitting the public markets, the company hasn't reported any positive free cash flow. Mostly the company has spent a lot of money and turned to lenders and shareholders to hand over more cash.

Of course, not everyone has a dour view. My Foolish colleague Jennifer Schonberger recently interviewed DryShips Chief Operating Officer Pankaj Khanna. At the conclusion of the interview, Khanna gave a pretty bullish case for his company's stock:

We think the company is very cheap, with the stock trading at $6 and change. We think our NAV on dry bulk and the cash alone is about $6. So when you buy DryShips at $6, you're basically getting the drill ships for free. I think we're working to release that valuation by doing the IPO [of DrillShips].

But here's the important question: What's your take? Is DryShips a chronic capital destroyer or an attractive, undervalued stock? Get in the action by clicking over to CAPS. It's absolutely free, and there are already more than 145,000 stock pickers chipping in to find the best stocks out there.

DryShips has been turning to shareholders to give it money over the past few years. For my portfolio, I prefer companies that reliably put money in my pocket.