Trade-Ideas: DryShips (DRYS) Is Today's

Editor's Note: Any reference to TheStreet Ratings and its underlying recommendation does not reflect the opinion of TheStreet, Inc. or any of its contributors including Jim Cramer or Stephanie Link.

Trade-Ideas LLC identified DryShips ( DRYS) as a "perilous reversal" (up big yesterday but down big today) candidate. In addition to specific proprietary factors, Trade-Ideas identified DryShips as such a stock due to the following factors:

  • DRYS has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $31.4 million.
  • DRYS has traded 17.6 million shares today.
  • DRYS is down 3.7% today.
  • DRYS was up 7.1% yesterday.

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More details on DRYS:

DryShips Inc. owns drybulk carriers and tankers that operate worldwide. The stock currently has a dividend yield of 6%. Currently there are no analysts that rate DryShips a buy, 1 analyst rates it a sell, and 5 rate it a hold.

The average volume for DryShips has been 4.9 million shares per day over the past 30 days. DryShips has a market cap of $921.7 million and is part of the services sector and transportation industry. The stock has a beta of 2.49 and a short float of 1.6% with 0.42 days to cover. Shares are up 35.6% year to date as of the close of trading on Friday.

STOCKS TO BUY: TheStreet Quant Ratings has identified a handful of stocks that can potentially TRIPLE in the next 12-months. Learn more.

TheStreetRatings.com Analysis:

TheStreet Quant Ratings rates DryShips as a sell. The company's weaknesses can be seen in multiple areas, such as its deteriorating net income, generally high debt management risk, disappointing return on equity and generally disappointing historical performance in the stock itself.

Highlights from the ratings report include:
  • The company, on the basis of change in net income from the same quarter one year ago, has significantly underperformed when compared to that of the S&P 500 and the Marine industry. The net income has decreased by 14.0% when compared to the same quarter one year ago, dropping from -$15.97 million to -$18.21 million.
  • The debt-to-equity ratio of 1.14 is relatively high when compared with the industry average, suggesting a need for better debt level management.
  • Current return on equity is lower than its ROE from the same quarter one year prior. This is a clear sign of weakness within the company. Compared to other companies in the Marine industry and the overall market, DRYSHIPS INC's return on equity significantly trails that of both the industry average and the S&P 500.
  • DRYS has underperformed the S&P 500 Index, declining 8.44% from its price level of one year ago. The fact that the stock is now selling for less than others in its industry in relation to its current earnings is not reason enough to justify a buy rating at this time.
  • DRYSHIPS INC reported flat earnings per share in the most recent quarter. The company has reported a trend of declining earnings per share over the past year. However, the consensus estimate suggests that this trend should reverse in the coming year. During the past fiscal year, DRYSHIPS INC reported poor results of -$0.64 versus -$0.22 in the prior year. This year, the market expects an improvement in earnings (-$0.28 versus -$0.64).

STOCKS TO BUY: TheStreet Quant Ratings has identified a handful of stocks that can potentially TRIPLE in the next 12-months. Learn more.

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