Blake Bos is bearish on DryShips (NASDAQ:DRYS) and here's why. The company generated about $113 million of earnings before interest, taxes, depreciation, or amortization in the first quarter, this can also be viewed as an approximation of operating cash flow. Of that, $56 million goes to interest expenses, and the remaining $57 million can be used for capital expenditures. Simply stated, $57 million for DryShips isn't going to cut it. This low level of cap ex crimps the company's ability to modernize its fleet with fuel-efficient ships, and that, in turn, puts DryShips at a competitive disadvantage. In fact, if you want to invest in a shipping company, a better alternative is Diana Shipping (NYSE:DSX), with a more modern and fuel-efficient fleet than DryShips.
Blake Bos has no position in any stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.