DRYS has too much debt, don't know how money will be made here.
I would like anyone to tell me how they expect to make money on this stock. Their debt load far exceeds the value of their ships and ORIG. To make money on this stock the BDI would need to move up significantly and quickly.
I have been making the case for Paragon (PRGN) because there is much more value there. If the BDI goes up 50% (which it likely will eventually) DRYS will still be struggling for survival while PRGN will likely be trading at 10X it current value.
Paragon has positive equity now:
Here are the ships owned by Paragon and the current, depressed market values:
3 Handysize 2012/2012 value 22 million each= 66
2008 Supramax 18
2005 Supramax 15
1999 Panamax 9 millionx3= 27
2001 Panamax 12
2006 Panamax 3x 20=60
2009 Panamax 24
Total ship value= 222 million
16% interest in box ships= 21 million
Cash= 25 million
Total assets= 268 million
Current equity-73 million
Current market cap-27 million
A couple people said I am slightly overvaluing PRGN's assets, even if we reduce the equity by 10 or 20 million this stock is trading at half of equity.
Add up the numbers (all the ships and ORIG stake) for DRYS then look at the debt and see where you end up.....
I think you have to first understand how accounting works with a majority owned subsidiary, that you have to breakout ORIG's portion of the debt as the DRYS financial statement is a consolidation of both companies. All of it.