NEW YORK ( TheStreet) -- DryShips Incorporated (Nasdaq: DRYS) has been downgraded by TheStreet Ratings from hold to sell. The company's weaknesses can be seen in multiple areas, such as its generally disappointing historical performance in the stock itself and generally weak debt management.

Highlights from the ratings report include:
  • Net operating cash flow has increased to $124.40 million or 29.58% when compared to the same quarter last year. The firm also exceeded the industry average cash flow growth rate of 10.45%.
  • The gross profit margin for DRYSHIPS INC is currently very high, coming in at 77.60%. It has increased from the same quarter the previous year. Along with this, the net profit margin of 21.90% significantly outperformed against the industry average.
  • Compared to other companies in the Marine industry and the overall market on the basis of return on equity, DRYSHIPS INC underperformed against that of the industry average and is significantly less than that of the S&P 500.
  • DRYS's debt-to-equity ratio of 0.88 is somewhat low overall, but it is high when compared to the industry average, implying that the management of the debt levels should be evaluated further. Despite the fact that DRYS's debt-to-equity ratio is mixed in its results, the company's quick ratio of 0.52 is low and demonstrates weak liquidity.
  • DRYS has underperformed the S&P 500 Index, declining 23.31% from its price level of one year ago. Looking ahead, other than the push or pull of the broad market, we do not see anything in the company's numbers that may help reverse the decline experienced over the past 12 months. Despite the past decline, the stock is still selling for more than most others in its industry.

DryShips, Inc., through its subsidiaries, engages in the ownership and operation of drybulk carriers and drilling rigs that operate worldwide. The company has a P/E ratio of 20.5, below the average transportation industry P/E ratio of 472 and above the S&P 500 P/E ratio of 17.2. DryShips has a market cap of $1.5 billion and is part of the services sector and transportation industry. Shares are down 13.7% year to date as of the close of trading on Friday.

You can view the full DryShips Ratings Report or get investment ideas from our investment research center.
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