This Day On The Street
Continue to site
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

DryShips Tops Views; Stock Jumps

The charter would apparently help DryShips find a loan to cover the more than $1 billion it still owes a South Korean shipyard for two drilling vessels it has on order there.

Investors have been waiting for such an announcement since last year.

Uncertainty surrounding the company's drillships business has dogged DryShips' stock for much of the last year. "The shares should now see an immediate lift and close the gap toward its 'real' equity value following this contract," Nokta wrote, though he added that the prospect of equity dilution from an at-the-market offering of stock by the company could still drag on the stock.

"At this point, it is still unclear how much of that offering has been/will be issued, as DryShips is now better positioned," he said.

Nokta maintained his hold rating on DryShips stock, but said that the contract news could mean that other charter deals are in the works, which would help lift the company's shares toward $7. That's where Nokta puts DryShips' net asset value, or NAV.

Word of the deal may have leaked on Monday, when DryShips stock leapt more than 8% on little news except an upgrade by a shipping analyst at Morgan Stanley (MS)

Huntington Asset Advisors' Peter Sorrentino noted recently that he likes DryShips because it "specializes in the supply and movement of deepwater drilling equipment. With the moratorium in the Gulf of Mexico there are a number of rigs being moved currently to the west coast of Africa and towards the east coast of Brazil. This activity is not currently reflected in estimates for the company and should result in earnings surprises for the next couple of quarters."

"In addition, the demand for dry-bulk shipping of grains and minerals will be stronger than initially forecast due to both weather and industrial production issues," he added.

Sorrentino said DryShips is in a position where, if Baltic Dry shipping rates tick up on better economic data, it will take off.

The analyst expects DryShips' stock to at least double within a year.

>>13 Hot Stocks Poised to Double, Triple ... Even Quadruple

-- Written by Miriam Marcus Reimer in New York.

>To contact the writer of this article, click here: Miriam Reimer.

>To follow the writer on Twitter, go to http://twitter.com/miriamsmarket.

>To submit a news tip, send an email to: tips@thestreet.com.

READERS ALSO LIKE:



>>See our new stock quote page.

Get more stock ideas and investing advice on our sister site, Stockpickr.com.
Disclosure: TheStreet's editorial policy prohibits staff editors and reporters from holding positions in any individual stocks.
3 of 3

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
Only $9.95
14-Days Free
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
SYM TRADE IT LAST %CHG
DRYS $0.61 -3.20%
ESEA $0.76 5.60%
FREE $3.53 38.00%
PRGN $0.68 0.50%
DSX $7.05 0.28%

Markets

DOW 17,618.77 +22.42 0.13%
S&P 500 2,067.13 +9.49 0.46%
NASDAQ 4,995.3970 +36.9290 0.74%

Free Reports

Top Rated Stocks Top Rated Funds Top Rated ETFs