NEW YORK (TheStreet) -- DryShips (DRYS) made gains over Tuesday, adding 5% to $3.81 by late afternoon. The heavy-volume stock saw 11.7 million shares change hands, 5 million less than its three-month average daily trading volume.
On Friday, the dry-bulk shipper announced the approval of loan amendments. The Greece-based business entered into an Amendment and Restatement Agreement to its July 2013 credit agreement.
"We are pleased with the successful closing of this important transaction which extends Ocean Rig's debt maturities. We effectively refinanced the short-term tranche of the Term Loan B Facility with a fungible add-on to the long-term tranche. Post transaction, the entire $1.9 billion facility will mature not earlier than the third quarter of 2020," said DryShips CEO George Economou in a statement.
The Baltic Dry Index, which measures activity along the world's major shipping routes, saw a 5-point decrease to 1,091 on Tuesday.
TheStreet Ratings team rates DRYSHIPS INC as a Hold with a ratings score of C-. The team has this to say about their recommendation:
"We rate DRYSHIPS INC (DRYS) a HOLD. The primary factors that have impacted our rating are mixed -- some indicating strength, some showing weaknesses, with little evidence to justify the expectation of either a positive or negative performance for this stock relative to most other stocks. The company's strengths can be seen in multiple areas, such as its revenue growth, solid stock price performance and expanding profit margins. However, as a counter to these strengths, we also find weaknesses including deteriorating net income, generally higher debt management risk and disappointing return on equity."
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- DRYS's revenue growth has slightly outpaced the industry average of 11.8%. Since the same quarter one year prior, revenues rose by 17.8%. This growth in revenue does not appear to have trickled down to the company's bottom line, displayed by a decline in earnings per share.
- Compared to its closing price of one year ago, DRYS's share price has jumped by 53.60%, exceeding the performance of the broader market during that same time frame. Regarding the stock's future course, our hold rating indicates that we do not recommend additional investment in this stock despite its gains in the past year.
- The gross profit margin for DRYSHIPS INC is rather high; currently it is at 55.52%. It has increased significantly from the same period last year. Regardless of the strong results of the gross profit margin, the net profit margin of -15.77% is in-line with the industry average.
- Currently the debt-to-equity ratio of 1.99 is quite high overall and when compared to the industry average, suggesting that the current management of debt levels should be re-evaluated. To add to this, DRYS has a quick ratio of 0.65, this demonstrates the lack of ability of the company to cover short-term liquidity needs.
- 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.
- You can view the full analysis from the report here: DRYS Ratings Report