This Day On The Street
Continue to site right-arrow
ADVERTISEMENT
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here
TheStreet Open House

DryShips: Shipping Winners & Losers

NEW YORK ( TheStreet) -- Dry-bulk stocks were under pressure Thursday as investors and traders, inspired by the broader market selloff, fled all sorts of risky plays -- for which shipping equities certainly qualify.

Mike Bellafiore, a trader and partner at SMB Capital, said "risk aversion" has suddenly become a factor again. Beaten-down shares of dry bulkers had staged a minor late-summer rally, especially DryShips (DRYS - Get Report), the most widely traded among shipping issues, as investors sought to put money to work. But now, Bellafiore said in an email, market participants are " moving out speculative names and into more defensive positions."

From a fundamental perspective, investors may have been reacting, at last, to a precipitous drop in shipping rates that's been ongoing for about the last two weeks, posited Natasha Boyden, a research analyst with Cantor Fitzgerald.

According to the Baltic Exchange, the London-based shipping brokerage, rates for Capesize ships, the biggest dry-bulk haulers on earth, had fallen below the $23,000-a-day level, which is nearly break-even for ship owners.

Even as those rates tumbled, equities in the sector had risen sharply. DryShips, for example, had gained 43% from the beginning of September until late last week, when the stock began to slide.

Michael McDonough, RealMoney's resident shipping-sector observer, said in an email that many investors are equating economic recovery with a run-up in dry-bulk stocks. In normal times, McDonough says, this may be true. But with a well-documented slate of newly built vessels coming into service, a glut may well be developing, which would weigh on company profits as well as share prices.

1 of 2

Check Out Our Best Services for Investors

Action Alerts PLUS

Portfolio Manager Jim Cramer and Director of Research Jack Mohr reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

David Peltier uncovers low dollar stocks with serious upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
14-Days Free
Try it NOW
Only $9.95
Try it NOW
14-Days Free
Try it NOW

Check Out Our Best Services for Investors

Dividend Stock Advisor

David Peltier identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Updates with exact steps to take - BUY, HOLD, SELL
Trifecta Stocks

Every recommendation goes through 3 layers of intense scrutiny—quantitative, fundamental and technical analysis—to maximize profit potential and minimize risk.

Product Features:
  • Model Portfolio
  • Intra Day Trade alerts
  • Access to Quant Ratings
Options Profits

Our options trading pros provide over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • Actionable options commentary and news
  • Real-time trading community
Try it NOW
Try it NOW
Try it NOW
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!
SYM TRADE IT LAST %CHG
EXM $0.00 0.00%
GNK $0.00 0.00%
EGLE $8.02 0.00%
DRYS $0.83 0.00%
DSX $6.28 0.00%

Markets

DOW 17,712.66 +34.43 0.19%
S&P 500 2,061.02 +4.87 0.24%
NASDAQ 4,891.2190 +27.8570 0.57%

Partners Compare Online Brokers

Free Reports

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs