2012 is nearing its end, and now's a good opportunity to look at what happened throughout the year to the stocks you follow. If you know the important things that a company achieved, as well as any challenges it failed to overcome, then you can make a better decision about whether it really deserves a spot in your portfolio.
Today, let's look at DryShips (DRYS +0.00%). The entire shipping industry has fared terribly in recent years, as a glut of shipping vessels following the economic boom of the mid-2000s has sent shipping rates into the bilge tank. But eventually, the global economy has to turn higher. At that point, will DryShips be able to take advantage? Below, you'll find more on what moved shares of DryShips this year.
Stats on DryShips
|
Year-to-Date Stock Return |
(8.5%) |
|
Market Cap |
$696 million |
|
Revenue, Past 12 Months |
$1.26 billion |
|
Net Loss, Past 12 Months |
($124 million) |
|
1-Year Revenue Growth |
30.1% |
|
CAPS Rating |
*** |
Source: S&P Capital IQ.
Has DryShips finally hit bottom?
The shipping industry has been stuck in the doldrums for years, as the ever-plunging Baltic Dry Index points to weaker revenue for shippers. Although Safe Bulkers (NYSE: SB) and Navios Maritime (NYSE: NM) have found ways to remain profitable even in this tough environment, DryShips is just one of many peers that have consistently lost money throughout the multiyear industry crisis.
One thing DryShips got things right, though, was to diversify into drilling rigs. The company's Ocean Rig (ORIG +0.00%) subsidiary has seen big surges in revenue, taking advantage of the same trends that has made ultra-deepwater competitor Seadrill (SDRL +0.00%) a force to be reckoned with in the world's oceans. DryShips has made public offerings of its Ocean Rig interest, but it still holds a majority stake in the drilling rig subsidiary.
In its most recent quarter, DryShips disappointed investors again. Despite posting an 8% rise in revenue, Ocean Rig's business played a substantial role in those gains. Moreover, DryShips still posted a loss of $0.13 per share, much larger than what analysts had expected. With rival Overseas Shipholding Group having gone bankrupt in November, a long-awaited shakeout in the industry may finally push capacity downward enough to lead to a turnaround for those players that survive it.
Until shipments of major cargo items like coal start moving higher again, it'll be tough for DryShips to see a big turnaround. Investors will likely have to remain patient rather than expecting a quick turnaround for DryShips and its peers.
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