Barron's Says DryShips (DRYS) Is A Strong Bet On Global Growth
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Price: $5.24 --0%
Rating Summary:
3 Buy, 5 Hold, 1 Sell
Rating Trend: = Flat
Today's Overall Ratings:
Up: 6 | Down: 5 | New: 3
Rating Summary:
3 Buy, 5 Hold, 1 Sell
Rating Trend: = Flat
Today's Overall Ratings:
Up: 6 | Down: 5 | New: 3
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DryShips (Nasdaq: DRYS) has seen its stock cut by more than half, to the low $60s from a high of $131 last year. Barron's believe the price collapse presents an opportunity for investors with a stomach for a volatile stock.
Although global trade may slow this year, but Barron's said it will come back, and DryShips' profits, and shares, should move up over the long term, even if 2008 growth turns out to be lower than Wall Street expects.
DryShips is currently trading 3.5 PE and 5 times 2009 forecasts, trading 50% below its competitors. Even DryShips profits fell as much as 50%, DRYS would still trade at a very modest 7 PE. In the past, the stock has traded as high as 40x, so the current multiple is quite small by historical standards.
"With a P/E of three, DryShips trades as if it were going out of business," says Scott Black, president of Delphi Mgmt, a Barron's Roundtable member whose fund owns about 200,000 of the shares.
"It's discounting the total collapse of dry bulk trade and saying that trade for India and China is over." Delphi has been buying lately as the stock has fallen. Chris Armbruster, an analyst at Al Frank Asset Mgmt, days DryShips' growth profile is very underestimated, and Al Frank has been buying shares again.
There might be some short-term problems, but India, China and other emerging markets will continue to develop, and that will be beneficial for DryShips.
The Disciplined Investor Store
Although global trade may slow this year, but Barron's said it will come back, and DryShips' profits, and shares, should move up over the long term, even if 2008 growth turns out to be lower than Wall Street expects.
DryShips is currently trading 3.5 PE and 5 times 2009 forecasts, trading 50% below its competitors. Even DryShips profits fell as much as 50%, DRYS would still trade at a very modest 7 PE. In the past, the stock has traded as high as 40x, so the current multiple is quite small by historical standards.
"With a P/E of three, DryShips trades as if it were going out of business," says Scott Black, president of Delphi Mgmt, a Barron's Roundtable member whose fund owns about 200,000 of the shares.
"It's discounting the total collapse of dry bulk trade and saying that trade for India and China is over." Delphi has been buying lately as the stock has fallen. Chris Armbruster, an analyst at Al Frank Asset Mgmt, days DryShips' growth profile is very underestimated, and Al Frank has been buying shares again.
There might be some short-term problems, but India, China and other emerging markets will continue to develop, and that will be beneficial for DryShips.
The Disciplined Investor Store
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