(DRYS) - DryShips - is profitable and it is currently pays a dividend yield of nearly 6%

Vivian Lewis and her team, from the Global Investing newsletter, discuss a recent bounce back experienced by shares of DryShips. Find out what these featured experts have to say about the company and the industry in which it operates. Also, read excerpts from various financial publications regarding the dry bulk carrier company. Them Dry Ships from October 2 DryShips (DRYS) bounced back when its reported numbers missed forecasts. Buying began as investors realized that 97% of the fleet was being chartered in the quarter with TCE rates (average daily revenues) of over $20,000 when daily vessel operating expenses were around $4,000. Even with TCE rates down 40% from a year ago, DRYS is profitable and it is currently pays a dividend yield of nearly 6%. Dryships' fleet is 29 dry bulk ships and it recently agreed to buy 5 more, all to ship coal, iron ore, and grain. China, coal and iron ore poor, continues robust demand for the commodities DRYS hauls. The dry bulk market will strengthen as the global economy expands, and its spot-market focus means DRYS should continue to see its coffers as full as its ships. DRYS' fleet is aged 11 years, while the average drybulk fleet age is nearer to 16 years. The economic life of a drybulk vessels is 25+ years. DRYS has a young fleet and moreover focused on Panamax vessels, the workhorses of drybulk. The daily Panamax spot rate at end June was $19,500; today it is 27,500. The stock and its earnings will be volatile. Motley Fool published “DryShips: An Investing Shipwreck” in which CEO George Economou and DRYS were attacked for missteps from the default of Economou's Alpha Shipping (brought down by the holders of its convertible notes in 1999) to related-party ship purchases reported in DryShips' 2005 initial public offering. The article was based on a piece by Kate Welling, former Barron's reporter, which came out 18 months ago, and it in turn was based on material which was in the prospectus for DRYS' ipo. This is old news. Here is an extract of an article by Alaric Nightingale in Bloomberg, reprinted with permission from Fullermoney.com (London) on DRYS: “While the Baltic Dry Index, a benchmark for freight rates, has risen 49% in the past 12 months, the price for individual shipments has risen even more at times in the face of demand from China. BHP Billiton, the world's biggest mining company, in Feb. paid $16,250 a day to hire a ship to send 70,000 tons of Australian iron ore to China. Six months later, the company paid almost three quarters more–$28,000 a day–for the same voyage, according to London-based shipbroker Galbraith's Ltd. “Chinese industrial production rose 16.7% in July, and the economy expanded 11.3% in the second quarter. The iron ore, coal, and coke Chinese companies sucked in this year fed record steel production. China produced 36.1 million metric tons in July, up 22% from a year earlier, according to the Brussels-based International Iron and Steel Institute, boosting demand for export and import shipments at a stroke. “The demand for iron ore and coal is pretty substantial, unless you think that the market in China is going to tank, which I don't think is going to happen,' said Scott Black, who manages $1.6 billion for Delphi Management Inc. in Boston.” David Fuller adds: “the Baltic Dry Index is interesting because it is pushing higher once again. This is occurring at a time when lots of financial pundits are warning of recession in the USA, a sharp slowdown in China and the rest of Asia, and a collapse of commodity prices. I respectfully disagree, although it would be unkind of me to add that we have heard similarly pessimistic views over the last three years, usually from the same sources. To the extent that the Baltic Dry Index is relevant, it appears to be bullish.” (cf ADRWatch). DRYS agreed to sell the 1995-built, 71,747 dwt panamax bulkcarrier, MV Panormos, for about $35 million, to an outside buyer. Delivery will be in Q4. DRYS will purchase a 2000-built, 74,716 dwt panamax carrier (to be renamed MV Redondo) for about $40.75 million also to be delivered, charter-free, in Q4. DRYS also signed contracts for two panamax drybulk vessels to be built in China for $33.25 million each, to be delivered in Q4 2009 and Q1 2010. Content Courtesy: Global Investing | Blog Home| VitalStocks Home Tags: DRYS, DryShips, Stock-market, Stocks, Investing, Stock Trading, Business, Finance, Trading, Investing Newsletter, Stock Picks, earnings, analysts, analysts estimates