DryShips, Inc. (DRYS)
by Zacks Equity ResearchApril 11, 2011 | Comments : 0 Recommended this article: (0)
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We believe the sole reason for this dismal condition is the sheer increase of ships under operation that have resulted in intense price competition. The spot rate has fallen to such a low level that even surging commodity prices in the Asian markets failed to offset the loss of the vessel owners.
We believe continuation of this pricing trend may significantly jeopardize DryShips future financials. The company is highly leveraged with nearly $2.33 billion of net debt at the end of fiscal 2010. We also remain skeptical regarding the long-term growth prospect of the oil tanker market.
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