We will see if the analysts discount this news of a delay in FLINT data ...this is obviously not a good development as everyone expected a July release and McKinn did not say(can listen on website) when it would now be released. Still will all come down to the FLINT data but hard to see pps going up at all until than and will be downward bias imo.
Nice to read a legitimate, sensible analysis from a reputable company rather than all the SA commentary/blather...and of course all the bs on this board.
DryShips ( DRYS : Nasdaq)
By Imperial Capital ($3.40 June 24, 2014)
We are maintaining our Outperform rating of DryShips and raising our price target to $4.00 from $2.75.
Our price target for DryShips (ticker: DRYS ) is equal to 18% potential upside, based on the recent share price. With an improvement in valuation at consolidated Ocean Rig UDW ( ORIG ) [a DryShips majority-owned subsidiary] and prospectively improving dry bulk and tanker day rates, we think the shares are attractively priced.
We are maintaining our Outperform rating on the 5% senior unsecured convertible notes at a price of 99.0 (7.23% yield to maturity). Although the company is uncomfortably close to its December 2014 maturity of its converts, we still think it has several levers available in its arsenal to refinance the convertible notes at "par" at maturity.
The maturity of the 5s is less than six months away and we think the notes represent an attractive short-term investment opportunity given significant asset coverage and various levers the company has at its disposal to refinance the convert at its maturity in December. The loan-to-value (LTV) ratio is manageable at 53%, and the convert has an implied equity "cushion" of over $1.472 billion, further underscored by the presence of a $1.355 billion equity market capitalization. We think the company is evaluating ways to refinance the 5s without having to directly negotiate with the existing holders who are likely to demand some sort of exchange offer in order to extend out of the maturity. On its earnings release on May 24, management noted "...we expect to conclude various financial initiatives to fund the maturity of our convertible notes which we expect to take place in December of this year."
Our net asset value (NAV) estimate is about $3.35 a share, but we see further upside to well over $4 if Ocean Rig achieves "fair value" and uptick in dry bulk and tanker rates. We have provided a sum-of-the-parts NAV analysis,
Imperial very reputable imo..they upgraded drys last August right before pps took off...also have been spot on with airlines over past few years.
guy, thanks for info, I should have checked it out before posting....getting lazy. I plan on holding until FLINT data released. I figured if I could continue holding all of my 7500 shares the CMO could hold his...
Unless positive breaking news comes out beforehand I will be surprised if pps moves up that much and if does may be Buy the Rumor, Sell the News..Two presentations scheduled next week so will see if anything new comes out.
As I have stated before good chance pps will hit 80-100$ in next two years ...based on 8-9$ eps, was looking to add more shares at 38.50 but will take the bounce back any day..bought 10k at 32$ a few months back, should have added more.
Your dreaming, way too high imo. Lets assume orig pps increases 20%, that would put drys's 60% ownership value at 1.8B. Put a value on drys's shipping business at .5B(its being valued at zero currently) and get total cap of 2.3B which would be about 5.25 share. My current fair value estimate is 4.50 and high target 6.00 on increase in rates similar to December 2013.
My advise to GE which he will not follow: SELL! drys still trading at value of orig holdings...sell drys excluding orig for 1.50 share.
One thing that is clear is that any solid treatment for NASH/Liver Disease will be a cash machine...especially for whoever is first to market.
These mergers good/bad news for drys? Market seems to be leaning towards good news per pps up today with BDI in the gutter...