DryShips Inc. (DRYS)

All Comments on DRYS

  • commenter
    gaucho
    Feb 28 02:09 PM
    My Website
    Dry Bulk Shipper Anomaly in Spot Pricing Creates Buy Opportunity [view article]
    According to the Friedman Billings and Ramsey's analysts who wrote this article on Feb. 25th, world wide power plants need to immediately purchase 150-200 Million Tons of coal in order to replenish their reserves which have fallen to dangerously low levels as a result of the flooding in Australia, the chronic power outages in South Africa and the coldest winter in Southern China in fifty years. These events collided in a near perfect storm to severely disrupt world wide coal mining operations for several months. In addition, this article also forecast that by 2012, the world will require another 1.3 billion tons of coal to be mined and shipped in order to satisfy 1,000 new coal powered plants which are being built to provide the world with an additional 300 gigawatts/annum of power. Since most of this coal will be shipped from Australia, Africa, North America and South America to Asia and Europe, the world will need a heck of a lot more dry bulk cargo ships both in the short run and in the long run. To put this into perspective, to haul another 1.3 billion tons of coal using ships which carry on average 100,000 tons per trip, will require an additional 13,000 dry bulk freighter trips per year. This does not account for other huge freight increases which will also occur from shipping commodities such as iron ore, cement, copper ore, etc.
    Additionally Japan importing from the US for coke/coal due to problems in Australia.
    The recent resolution of negotiations for the ore prices and subsequent catch up in shipments you have a perfect storm for the dry shippers.     Reply
  • commenter
    tencjedd
    Feb 28 01:21 PM
    DRYS: Shipper of the Global Commodities Boom [view article]
    DRYS realist,

    I've already done all the things that you suggest. I'M IN THE BUSINESS - I have been for almost 18 years.

    If you've done any of the work that you suggest others do, and compare the metrics to the other publicly traded companies, you will find...

    1) Dryships average daily operating costs are the highest in the industry.

    2) Dryships wastes TENS OF MILLIONS of dollars paying fees and commissions to George's related companies that it should be doing for itself for a FRACTION OF THE COST. Again compare the fees, commissions and expenses in related party transactions to ANY other dry bulk company.

    3) Read the original prospectus. Those of in the industry know George's past better than you. He issued debt and defaulted in less than 1 year WITHOUT any change in market conditions.

    4) Oceanrig makes sense for George because he gets paid a huge commission AND gets to cash out on a BIG personal gain on his (CARDIFF's) investment in the two drill rigs on order, by transferring it into DRYS.

    5) When DRYS churns its fleet, the vessel's are transfered through related parties first, not directly into DRYS. Again, costing DRYS additional $$ at shareholder expense, but at George's gain.

    6) Cardiff has additional bulkers on order from shipyards in conflict with DRYS, but that conflict will be solved when George transfers the newbuilding contracts into DRYS at record high prices. AGAIN, lining his own pocket with personal profits by transferring all of the risk to public shareholders, while pocketing another round of hefty commissions.

    George's fiduciary duty is lining his own pockets while transferring all risks to DRYS shareholders. DRYS concentrated exposure to the spot market leaves it vulnerable to major corrections when they happen (like January's events).

    The rise and fall of DRYS over the next 12 to 18 months will mirror the internet boom. DRYS is buying assets at inflated spot prices, when replacement assets can be bought forward at HUGE discounts. That means huge depreciation adjustments (impairment charges) are coming down the road. The churn on the free float is evidence that most investors (including George who has been decreasing his interests) are not committed to this time bomb.

    What I am suggesting is not going to happen overnight, but I do the detailed S & D analysis on the fleet and the basic materials sector. Live by the sword, die by the sword. DRYS lack of meaningful forward charter coverage will come back to haunt it down the road, with high cost assets that will have trouble competing with the THOUSANDS of new ships on order.

    Bulls and Bears always eat, and pigs always get slaughtered. Don't let greed get in the way of sound decision making. The stock's Beta says it all. Returns are always risk adjusted. DRYS's performance to date has been the result of a HIGH risk strategy. Let's not forget, the same guy who thinks its smart to be exposed to SPOT also thought it was a good idea to forward cover the balance of 2006's charter coverage at levels that were so cheap, the market was on the verge of starting to clean out some of the older tonnage in the market.     Reply
  • commenter
    Skates
    Feb 28 12:15 PM
    Dry Bulk Shipper Anomaly in Spot Pricing Creates Buy Opportunity [view article]
    Couldn't the earlier lower spot price be caused by a different reason? Meaning, there is (or was) more spot supply or less spot demand, therefore the earlier lower prices?"

    So maybe there was a slowdown or a preceived slowdown in this market. And it could be that the shippers were/are hedging the future price increases, but having less takers on the long or one and two year contracts, so possibly is there less demand?

    This might be putting more capacity or ships in the spot market? Thus lowering price.

    So wouldn't the fact that spot prices are still lower than long positions be a reason for caution. Or, do you see that chaning soon? Just posing the question, not attacking your position.

    Reply
  • commenter
    Camden
    Feb 28 11:50 AM
    DRYS: Shipper of the Global Commodities Boom [view article]
    DSX Lover,

    Your comment "George is a clown for bleeding the company's future for a stake in Ocean Rig" shows how little you know about business. George knows that the current rates are historically high and the there are a lot more ships headed to market in coming years. He knows the dry bulk business will be making less money a few years out. He is diversifying the company's assets into a business with a similar business model (the rental business) that is likely to have a strong earnings profile for many years to come.

    Also, you say "There is no such thing as growth in earnings for 2008, 2007 was the peak year in rates..." Even if 2007 WAS the peak in rates it doesn't mean it will be the peak in earnings for Dryships. Even with the drop in the BDI, rates are currently much higher than than they were 12 months prior. Dryships will have a larger fleet (many more billed days) and Dryships put 35% of the fleet into long term charters back in October when rates had skyrocketed so that will be collected for the entire year. DRYS earnings WILL be higher in 2008 unless the DBI drops considerably from where it is today.     Reply
  • commenter
    sunrises
    Feb 28 10:20 AM
    Oil Inventory Preview and More Energy Earnings [view article]
    As a reader, I gain knowledge from the pros. Thanks to all the pros (trader mark, eli, eric, stockenblker, roy m., traderdesk etc...) for the written articles.

    In addition, Bloomberg sees gains in oil till second quarter. RIG, still a favorite for many, has analysts target with the least of $155 & high $196. Fast Money recommends a buy.

    Thanks for the article.     Reply
  • commenter
    TIRED
    Feb 28 09:15 AM
    Dry Bulk Shipper Anomaly in Spot Pricing Creates Buy Opportunity [view article]
    dsx is a great buy now it has long term contracts pays great dividend Reply
  • commenter
    Richard
    Schweitzer
    Feb 28 08:57 AM
    Dry Bulk Shipper Anomaly in Spot Pricing Creates Buy Opportunity [view article]
    How about data on the rate of DRY shipbuilding and scheduled deliveries from the yards. Reply
  • commenter
    DSX Lover
    Feb 28 08:56 AM
    DRYS: Shipper of the Global Commodities Boom [view article]
    I'm not on Dryships, because its going lower. When I drops to $70 I might buy it Depending on the BDI Index. George is a clown for bleeding the company's future for a stake in Ocean Rig. That huge debt will catch up to the company regardless of swaps or whatever hedge the company has, 1.250 Billion cost a lot to finance regardless of what you do. The BDI rates will not reach the high of November in 2007, and earnings will be lower, regardless of how many millions of capital gains does the company get from selling ships. There is no such thing as growth in earnings for 2008, 2007 was the peak year in rates, all the big charterers are already hedging with long-term charterers (Cargill, Bunge, BHP Billiton, Rio Tinto), Vale has been buying its own ships since last years, and I'm going to laugh when the BDI rates drop, and Drys fails to take advantage to charter long term. China can't be exporting 7.5% to the rest of the world, and expect to keep the whole world growth story to remain intact. I'm not a Bear, but these rates and commodities, have gone up too quickly. Millions have been made in the way up, but more millions will be made in the way down. Look at the hype in Apple and Google, and where they are at now. Reply
  • commenter
    A.S.D.
    Feb 27 10:20 PM
    Dry Bulk Shipper Anomaly in Spot Pricing Creates Buy Opportunity [view article]
    I picked up some Genco in the low $20s back in '06 when it was paying about 10% yield. I can't imagine anyone getting so excited about it in the $60-$70 range. If you must have it now, be ready to get out with any big move up -I will not be holding any shares this summer. Reply
  • commenter
    ACEMAN
    Feb 27 09:44 PM
    My Website
    Dry Bulk Shipper Anomaly in Spot Pricing Creates Buy Opportunity [view article]
    Emerging markets, especially China, and the Baltic Dry Index move together with commodities. But take a good look at the Index and you'll see a dramatic drop. Could emerging markets follow? Reply
  • commenter
    DRYS realist
    Feb 27 09:34 PM
    DRYS: Shipper of the Global Commodities Boom [view article]
    I disagree with your comments about George.

    I will be honest and say that last year I read all the one-sided hate about George. There are a few firms who have it out for him and have painted a one sided portrait of his past.

    Some take comments he makes and form a general opinion based on one liners and out of context quotes. Reading these slanted points of view stopped me from investing about 50 points earlier, then I revisited the stock and found more accurate and less biased accounts of what happened. You really should research more than one or two firms disdain for George, you might find out details which were MISSED by the people who dislike him.

    Is George different? yes. Can he be combative and difficult? Yes he can. I look past the differences and see what I feel is a strong business sense and a history of understanding the industry and taking risks which could turn out to be very smart decisions.

    The comparison between DRYS and an internet startup is completely laughable, you really are showing colors by making such a poor comparision. I was a stock broker during the internet boom, from the late 90's until a few years ago and I saw the internet stocks and the optic stocks and the similiarities are ZERO.

    As for sorting the buy and sale of ships, that isnt so tough to do, spend 20 minutes and create a spread sheet, you make it out to be an impossible task and it really isnt.

    Viewing OPERATION profits and costs is very easy, the 6-K has everything you need and I have no issue with the costs the company has for the vessels, nor the conflict of interests with Cardiff and DRYS. If you look ONLY at operational margins, DRYS is better than DSX and most all other Dry shippers that I follow.

    I have read almost word for word the bashings you make about George and his comments about the US investor and market. I have the ability to discern his real opinions, even if he sprinkles some sarcasm and points of view from time to time and I am fully aware of the risks associated with investing in DRYS.

    If you think there is risk that the Dry market goes under like the last time you reference, then please feel free to stop investing in ANY of the companies in the industry. I dont feel the negativity you do towards him or the company and am willing to take that risk and I have confidence in his experience and skills in the industry.     Reply
  • commenter
    DSX Lover
    Feb 27 04:25 PM
    Dry Bulk Shipper Anomaly in Spot Pricing Creates Buy Opportunity [view article]
    Its $117 for a Capesize today, and the information that the rates are going up to $135 to two years is innacurate. Look at the deployment fleet on DRYS website and you will see that it has Capesizes for $76K per day on Spot, because those are the rates that the chartered got between Nov-Dec when the trip was booked. That is huge drop from the record $184K per day booked on the previous trip. DRYS Spot rates are so volatile also because of port Congestion, in some ports of Australia the waiting time is higher than 30 days so there's no need to rush the shipments if the bulks are going to be waiting for that long. DRYS has massive debt, and unpredictable earnings, that's why is not worth $120 today. The record earnings for Q4 will not be duplicated again, and if you look at the fleet deployment you will see that most of the Panamax Fleet is chartered at rates between $45K and $60K a day and not the $85K a day it got on Q4. According to analysts in the Capital Conferences the average for Panamax for 2008 is 55K and 105K for Capesize. So make your earnings forecast based on those, and not the 95K and $175 it made on Q4. The Chinese economy will cool off after the Olympics and with that 65% increase in Iron Ore Prices and 7.5% inflation, China is exporting inflation that the World is not going to be able to pay. All these risks are priced in the Stock. Reply
  • commenter
    shara
    Feb 27 03:25 PM
    Dry Bulk Shipper Anomaly in Spot Pricing Creates Buy Opportunity [view article]
    very int and informative article. But if this is true then why is this sector getting beaten up regularly?? why is it so volatile?? even now DRYS stock prices are soaring ... any comments/insight on this?? Reply
  • commenter
    tencjedd
    Feb 27 01:38 PM
    DRYS: Shipper of the Global Commodities Boom [view article]
    Hey DRYS realist, I presume you are well aware of George's checkered past? Those of us in the industry (which I am) are well aware of it. If you aren't, then you should go back and read the original prospectus. George has a track record of leaving his investors high and DRY after he's cashed out. Maybe you should look at what's he been doing with his personal holdings - cashing out!

    DRYS will NEVER trade at market valuations similar to its competitors. A company of DRYS's size should be managing all of its operations internally. Instead, DRYS pays HEFTY fees (and commissions) to related companies owned by George to perform its functions. If you compare financial statements, you will see that DRYS's expenses are much higher than its competitors. And for the person that commented that DRYS is a cash cow earning $100K+ per day on ships that cost $7K per day to run, doesn't have a clue about the true economics of the business. $7K per day is DRYS's OPERATING COST, not its total cost. Do the math on a $105 million capesize ship - total cost is in the neighborhood of $33K per day. Of course, when you accumulate debt with the market at or near record highs, and don't take long term charter coverage against, you leave yourself extremely vulnerable to a market downturn. This is magnified for DRYS by the huge percentage of the float that trades on a daily basis!!! This stock is not for long term investors. Its become a vehicle for hedge funds to trade the spot BDI through equity markets. George doesn't care because he is milking HUGE fees off of DRYS to line his pockets.

    And for the other commentor that mentioned the huge disconnect between revenue and profit growth in the 4th quarter, you need to be careful in separating out OPERATING income from gains on ASSET SALE INCOME. DRYS's "cheap" ships are being sold off in the name of 'fleet renewal' which also boosts income. They are being replaced with more expensive modern tonnage where the asset price is correlated to never before seen spot rates, but with little risk diversification in the charter coverage strategy. Of course, George loves the whole process because HE gets paid commissions to perform the basic functions that EVERY other company in the sector does for itself!

    This stock is no different than a late 1990's internet startup.

    If it smells fishy, there must be something rotting!     Reply
  • commenter
    Linkster
    Feb 27 10:54 AM
    Dry Bulk Shipper Anomaly in Spot Pricing Creates Buy Opportunity [view article]
    Most investors don't realize that 75% of the world's GDP comes from countries outside the Industrialized world. Their growth continues irrespective of American and European economies.

    Linkster     Reply
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