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    • Tue Apr 8th 10:35 AM | Rating: 0 0
      Commented on:
      Six Flags: More Excuses, Potholes Ahead
      Yes they certainly have problems. The common stock is going nowhere. However, if you think Six Flags survives, and it will in some form, then the place to be from a risk reward perspective is the PIERS preferred stock. They're trading at a significant discount to face value giving a nice yield and some preference in the pecking order if they blow up. The PIERS currently trade at $12 share and mature on August 15, 2009 with a face value of $25. This is the closest maturing debt outstanding according to the company's annual report.

      The market and revenue side of the equation is certainly debatable, but close to home vacations may actually hold up better than expected. However, today's economy means a quick fix isn't in the cards.

      In today's liquidity squeeze, a full blow up remains a real possibility, especially before the August 2009 redemption date, but I think the risk reward here is priced attractively. In the end, the debt is all priced at junk levels. Just remember that when investing!
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    • Thu Feb 28th 13:21 PM | Rating: 0 0
      Commented on:
      DRYS: Shipper of the Global Commodities Boom
      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.
      View article »
    • Wed Feb 27th 13:38 PM | Rating: 0 0
      Commented on:
      DRYS: Shipper of the Global Commodities Boom
      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!
      View article »
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