DSX Lover

DRYS: Shipper of the Global Commodities Boom

Dryships cannot be compared with DSX. Dryships goes spot on all time charterers, which are very volatile, has over $1.250 Billion in Debt, which is very risky, and a swing in the BDI or in interest rates, can throw off earnings down the toilet. It will have to pay more interest in order to serve that huge debt. Aside the 65% increase in the Iron Ore contract from RIO accepted by the steel builders is well below the spot price, and those increases are beginning to show inflation in CHina with 7.5% inflation rate, those increases will not be sustained.
Analysts at capital Link shipping expect Panamax rates at 55K and Capesize at 105K for this year which is were they are at now, and well below the rates for Q4 experienced by the earnings in DRYS.
DRYS will be shorted a lot, because of BDI volatility and that huge Debt on the B/S which makes it very risky, its fleet is getting old also.
In the other hand DSX, has brand new ships, averaging less than 5 years old, only 100K in debt and long term charters which provide stable visibility along with an 8% dividend yield. 6 Capesize ships chartered for 5 years, with 2 Panamax at 2+years. 12 Panamax on short term in order to take advantage of strong BDI with only 2 of those ships with rates above the current BDI rates. It is a much conservative company, with a stronger Balance Sheet and high dividend, which is less likely to be shorted. Just look what is happening to DRYS today, and how DSX is stable.