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November 2007

Recs

7

Ted Eats Fish

November 08, 2007 – Comments (4)

I gotta admit, I simply don't get it. Having read, World's Scariest Stock: DryShips by Rich "Cap'n Blood" Smith I'm confused about some stuff.

One of the things I'm confused about is the last line in the article; "Spread the word. Go to CAPS and rate it an underperformer now."

It made me wonder if Mr. Smith had lost his rear end playing this stock? I mean to me that was a very strange thing to say..."Go to CAPS and rate it [DRYS] an underperformer now". Why should people do that? It just all seems so [pause] sour grapes to me.

I appreciate that Mr. Smith has an opinion, and I think it's great that he is allowed to express it. I just thought it was a bit over the top not allowing folks to make up their own minds about the stock.

Needless to say, I have an opinion, not only about Mr. Smith's opinion, but about all of the stocks in Mr. Smith's article...and here it is.

First, I don't know Mr. Smith, or at least I don't think I've ever met him, or her. I did know some Smiths once, but I think they were from Perry County, Mississippi, and I don't think they had any kids named Mr.

There were some Smiths I met once on a bus. Seems like they had five kids. They were going to Nashville, that's in Tennessee, to be in the Grand Ole Opry. Or maybe they were going to clean the Grand Ole Opry or paint it, I'm not really sure anymore.

There was this little black headed girl I grew up with named Smith, but Smith was her first name, Etowah was her last name. She was actually a couple of years older than me, and used to tell me she was going to be a teacher same day. Then she would walk me into the woods behind her house...

[sigh]

So Mr. Smith's article pretty much says that this DryShips stock sux and if you buy any of it a big hand is going to come up from the depths and do less than pleasurable things to you. He also listed several other stocks in his article, which to me, seemed just as crappy an investment as DryShips.

DA RUNS

The first stock in the article was holding company DryShips, Inc. (Nasdaq: DRYS), a company that owns and operates a fleet of 35 dry bulk carriers, which are ships that take crap from one place in the world to another place in the world. Pretty exciting if you're into that sort of thing.

Based on the company's latest 10-K filing of December 2006, I have the stock on my watch list with a reasonable value of $3.50, a buy target of $1.75, a first sell target of $3.50, and a close target of $3.80.

The stock had a recent close of $106.20, with overhead resistance at $131.34, first support at $96.68, and second support at $50.99.

On the fundamentals side, the stock has a PE of 65, a Return on Invested Capital of 11%, free cash flow of ($0.11) , a tangible book value of $13.96, and a price to book ratio of 8.17.

I'm rating this one a RUNS, cause if you buy this one, the runs is what you're going to end up with.

DA SQUIRTS

Next up was holding company Diana Shipping, Inc. (NYSE: DSX), another company in the business of hauling someone else's crap from point A to point B.

Based on the company's latest 10-K filing of December 2006, I have the stock on my watch list with a reasonable value of $8.50, a buy target of $4.25, a first sell target of $8.00, and a close target of $8.80.

The stock had a recent close of $34.40, with overhead resistance at $45.15, first support at $31.85, and second support at $23.89.

On the fundamentals side, the stock has a PE of 35, a Return on Invested Capital of 16%, free cash flow of ($0.48) , a tangible book value of $7.34, and a price to book ratio of 5.85.

I'm rating this one a SQUIRTS, which is what you might get after eating fish.

DA WIPE

Excel Maritime Carriers, Ltd. (NYSE: EXM) was the next crap hauler in the article, and again, just like the prior two companies, this one is also a holding company.

Based on the company's latest 10-K filing of December 2006, I have the stock on my watch list with a reasonable value of $37, a buy target of $18.50, a first sell target of $36.00, and a close target of $40.

The stock had a recent close of $54.10, with overhead resistance at $59.29 and first support at $32.93.

On the fundamentals side, the stock has a PE of 38, a Return on Invested Capital of 13%, free cash flow of $4.15, a tangible book value of $16.07, and a price to book ratio of 3.68.

I'm rating this one a WIPE, ...hope you have something nice and soft to use.

DA BRICK  [more]

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