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DryShips, Inc. Message Board

  • ctn627 ctn627 Aug 22, 2008 10:57 AM Flag

    I simply don't understand investing...

    ...if this thing is being sold off hard for excellent results. This must be why I'm such a poor investor - I just don't get the logic here.

    Why are we not trading in line with its peers? This should be $120-$140 by now, easily. But since it's not - I give up!

    After I get out of this trade (bought in at $115), I'm going back to CDs. My wait for $115 will take a VERY LONG TIME now!

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    • i hear you bro... the whole thing has been pretty ridiculous...the bdi is steadily down, but i just dont see how this is not a 100 dollar stock at least...i gave up to after a cost basis of 92 and got out at 78 on the last surge ...i can's say it enough, i feel your pain and frustration...it has to be the most irrational illogical movement i have seen with a stock with these fundamentals

      • 1 Reply to joegm1
      • I understand what you are goin thru.

        I agree what is being said. The question you need to ask yourself is will I invest in this company at the price it is selling for now. If you would, buy more stock if you have the money. This will lower the price you paid for the stock. Then pick an exit point for your old shares and sell call options. Lets say the exit point in $95 per share. This is about the mid point of what you bought your old shares at $115 and the new shares at $75. That is your new break even. Sell call options for that price.

        I bought in at $90, $78 and $71. I gave up on my bull puts that I will get any shares at $65 or below.

        Now lets do some math, I will take GNK's PE ratio.

        Earnings for quarter: 3.60
        Quarters in year: 4
        Estimated Yearly Earnings: 14.40
        Genco's PE: 8
        Price SB: $115.20

        Therefore the $115 price you paid is FMV. If you add back the noise from the OR purchase and add in the future earnings of OR, you get an even higher FMV.

    • You've understood investing when you've understood that everyone else is wrong. And it seems to me you are of that opinion regarding Drys Q2 and market response. 115 is cheap for Drys, just do the math. I guess you've already done that. Keep buying companies with low forward PE ratio, and your investments will turn out OK when the Street start noticing the companies.

    • choicesdestinyfatefocus choicesdestinyfatefocus Aug 22, 2008 12:37 PM Flag

      Can't blame you for being frustrated. It's been going on all year in many stocks.

      At this price, DRYS has a P/E of just over 4 despite the positive future and locked in contracts. If it had at least a five PE it would be over 80.

      Totally nonsensical, so we just have to wait for Mr. Market to come out of rehab and see the light.

    • You just bought into DRYS at a high point. I think the main factor to know about the dry bulk shipping industry is that the market fluctuates a great deal based on economic conditions, ship supply and demand. Good earnings are not dependable and growth is not dependable. So typical evaluation, discounted cash flow analysis, for stock is this industry do not hold up. This is why a company like DRYS can earn $7.10 in a quarter and continue to have a PE under 5 and a really low PEG ratio. In this type of industry it seem to me that companies need to become dividend stocks to properly reward investors since share price growth is unpredictable. DRYS is not going that route yet, since they are diversifying and growing their fleet. What makes DRYS such an appealing investment is the deep sea drilling investment that can give them growth, and the high earnings from the shipping business that gives them captial, and a lot of it. Since the market is not perfect, there is a great deal of trading opportunites in DRYS and other shippers, based on short term economic changes, and the BDI. I think DRYS is a great investment <$75 a share. If DRYS starts paying a dividend it could be significant, and they are alluding to a spin off of the drilling company. I am not an expert in this industry like some of the others on this board, but I do think there is an explainable reason for the low PEs and the factors contributing to it are not likely to change.

    • There is no logic in this bear mkt, 45 points under water. F ....it double down if its a small postion

    • oh, one more thing...logic dont count..the market is maipulated ...always be ware of that...wall street is full of liars and cheats..it is like you are playing a game of poker and everyone at the table is cheating except for you.

    • The earnings had one bad aspect...missed the EPS caled for 4.57...was 3.60 lucky this is all it fell....still a great company with a bright future...hold on...

    • Again, shows the importance of using stops.

 
DRYS
3.26-0.06(-1.81%)Aug 27 4:00 PMEDT

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