Face it: Like Greece, Dry Shipping is in the toilet. Due to overcapacity and demand concerns, the shipping industry and the company stock prices have taken massive hits over the last 12 months. However, one Greek shipper has struggled, Billion Dollar penny stock DryShips, Inc. (Nasdaq: DRYS) appears to have lured investor pessimism to its stock price due to reasons which do not match the key valuation metrics of this undervalued shipping company.
DRYS is a holding company with owning and operating drilling rigs and dry bulk carriers globally. Based in Athens, Greece, DRYS was the company which purchased OceanFreight (Formerly traded on Nasdaq as OCNF) in May of last year creating our Best Penny Stock Pick of 2011 when OCNF shareholders saw a 4,300% increase in stock price from the date of our alert in 2012 to the date when DRYS purchased them in 2011. With 11 analysts expecting $0.50 EPS for 2012 and Estimated Revenues of $1.39 Billion, DRYS is significantly undervalued at this time and is a “must add” to stock watch lists.
DRYS YTD Stock Chart:
Current Price to Book (P/B) ratio on DRYS is 0.4 while its averaged 1.1 for the past 5 years, never being lowert than 0.2. Current Price to Sales (P/S) on DRYS is 1.3 while the company has averaged 2.4 for the since 2007, never lower than 0.7. Due to the cyclical nature of the industry, P/B and P/S are overlooked when valuation of the company is approached by most investors. P/B and P/S ratios tell a much more detailed story of the stock compared to P/E and alarm smart investors that the stock is significantly undervalued.
With 13% of Shares Held by All Insider and 5% Owners, 20% of Shares Held by 127 Institutional & Mutual Fund Owners, 23% of Float, DryShips is a target waiting to be captured at this price level even though it already jumped over 35% this month. The overcapacity in the industry will harm DryShips the least since the company is better diversified than the other dry shippers. DRYS recent investment in offshore driller Ocean Rig UDW (ORIG) and the recent $653 contract signed Monday will significantly help DRYS 2012 bottom line.Share