+ Watch DRYS
on My Watchlist
The Company owns and operates fleets. The company's fleet carries various drybulk commodities, including coal, iron ore, and grains, bauxite, phosphate, fertilizers and steel products.
Let me begin by saying that I absolutely hate the shipping sector. For some reason, the shipping industry seems to be nothing more than the capital-destroying airline industry, just with dividends. I'm sure that one can make a lot of money timing a purchase in a shipper right, but eventually the companies in the sector never seem to be able to control themselves and they build to overcapacity.Ahyhow, having said that, I am going to write something bullish about a shipper, DryShips (DRYS). Why have I made DRYS an exception to my "no shippers" rule? Because the company has hidden assets, specifically Ocean Rig an UltraDeep Water driller. In a world where easy to reach oil reserves are becoming harder and harder to find, this is the hottest sector of the drilling industry.Ocean Rig currently trades OTC in Norway. According to a recent research note by Sterne, Agee & Leach Ocean Rig's market cap implies a value of $5.32 per DRYS share. With a current share price of $3.93, this means that Mr. Market is assigning a valuation of negative $1.39 value for DryShip's dry bulk and tanker fleet. DryShips is holding a meeting with analysts next riday to announce what it plans to do with its drilling subsidiary. The catalyst that will unlock this hidden value is DRYS' plans to list shares of Ocean Rig in the U.S. later this year. When that happens, the market will realize that DRYS is undervalued.Source: Don't Dock DryShipshttp://online.barrons.com/article/SB50001424053111904472004576391620974522798.html?mod=BOL_hpp_oeDeej
FYI:DRYS is hosting an analyst day this Friday, June 24 to discuss plans for Ocean Rig.Sky Pilot
Deej,I am long DRYS.. here's my analysis: http://www.gurufocus.com/news/139775/dryships-value-with-a-catalyst-set-to-double#addcAlso, I think Ocean Rig itself is really undervalued (even though I included current mkt price in my analysis). Comps: OCRG SDRL RIGEV/EBITDA 6.4x 12x 8xEV/RIG 694m 1100m 900m^Source: (recent VIC write-up on Ocean Rig)There's also a couple month old write-up on DRYS on SZ which is worth examining.Foolishly,Connor
02-10-12: Petrobras Announces 26 New Deepwater Rigs; More than Expected: Petrobras announced plans to build 26 new deepwaterdrilling rigs in Brazilian shipyards with deliveries scheduled over the next 45-90 months. PBR is set to lease 21 rigs from Sete Brasilfor $530,000/day and five rigs from Ocean Rig at $548,000/day. The rigs will be required to have 55-65% local content. Sete Brasilalready oversees 4.6 billion and is planning to build seven offshore drilling rigs for Petrobras.
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