|Written by GSCR Staff|
|Wednesday, 28 August 2013 06:26|
In Monday’s Goldman Guide we mentioned possibly looking at European stocks as it seems that the region is finally on course for a rebound. What may seem crazy is that there is a lot of activity in stocks in the Greek shipping industry. Does investment or trade in the financial circus that is Greece make sense?
Let’s step back and take a look at this phenomenon from a large scale esoteric viewpoint. The Greek shipping industry could be viewed as a bellwether for the European comeback. First, Greece is synonymous with the economic downturn in Europe. Second, shipping in the region and beyond should pick up as business activity increases. Money managers and institutional investors are looking for value and future earnings, and this sub sector provides both if one believes that the European recovery has begun.
DryShips, Inc. (NASDAQ – DRYS - $2.44) looks to be the best small cap stock to trade or invest in the Greek shipping industry. The stock is under massive accumulation trading almost 5 million shares per day up nearly 50% over the last two months. An EPS turn-around is forecast from 2013 to 2014 going from the red this year to $0.36 per share next year. Additionally the DMA’s 5, 20, and 50 day signals remain very bullish.
The Company owns a fleet of 42 dry bulk carriers comprising 12 Capesize, 28 Panamax, and 2 Supramax with a combined deadweight tonnage of approximately 4.4 million tons; and 10 tankers comprising 4 Suezmax and 6 Aframax with a combined deadweight tonnage of approximately 1.3 million tons. Additionally, DryShips has majority ownership in its subsidiary, Ocean Rig, which owns and operates 10 offshore ultra deepwater drilling units comprising 2 ultra deepwater semisubmersible drilling rigs and 8 ultra deepwater drill ships. A bonus revenue source from oil!
As preposterous as it may have once appeared, Europe may be back on the right track with Greek shipping leading the way. A play with DryShips may be the course to charter for some profits. Look for a price target of somewhere around $3.50 in the remainder of the 2013 calendar.
Have a great day.
Disclosure: Holdman Small Cap Research is not affiliated in any way with Goldman Sachs & Co. Goldman Small Cap Research analysts are neither long nor short these shares but may elect to purchase the stock within the next 48 hours.
This Market Monitor blog was prepared for informational purposes only. Goldman Small Cap Research, (a division of Two Triangle Consulting Group, LLC) produces research via two formats: Goldman Select Research, which typically highlights small cap companies, and Goldman Opportunity Research, which features micro cap companies in a sponsored research format. Thus, the Select product reflects the Firm’s internally generated stock ideas while the Opportunity product reflects sponsored research reports.
It is important to note that while we may track performance separately, we utilize the same coverage criteria in determining coverage of all stocks in both research formats. Please view the company’s individual disclosures for each engagement, which can be found in each company-specific report. All information contained in this blog, newsletter and in our reports were provided by the Companies or generated from our own due diligence. Our analysts are responsible only to the public, and are paid in advance to eliminate pecuniary interests, retain editorial control, and ensure independence. Analysts are compensated on a per report basis and not on the basis of his/her recommendations.
The information used and statements of fact made have been obtained from sources considered reliable but we neither guarantee nor represent the completeness or accuracy. Goldman Small Cap Research did not make an independent investigation or inquiry as to the accuracy of any information provided by the Company, or other firms. Goldman Small Cap Research relied solely upon information provided by the Company through its filings, press releases, presentations, and through its own internal due diligence for accuracy and completeness. Such information and the opinions expressed are subject to change without notice. A Goldman Small Cap Research blog, report, note, or newsletter is not intended as an offering, recommendation, or a solicitation of an offer to buy or sell the securities mentioned or discussed.
This blog does not take into account the investment objectives, financial situation, or particular needs of any particular person. This blog does not provide all information material to an investor’s decision about whether or not to make any investment. Any discussion of risks in this presentation is not a disclosure of all risks or a complete discussion of the risks mentioned. Neither Goldman Small Cap Research, nor its parent, is registered as a securities broker-dealer or an investment adviser with FINRA or with any state securities regulatory authority.
ALL INFORMATION IN THIS BLOG, REPORT OR NEWSLETTER IS PROVIDED “AS IS” WITHOUT WARRANTIES, EXPRESSED OR IMPLIED, OR REPRESENTATIONS OF ANY KIND. TO THE FULLEST EXTENT PERMISSIBLE UNDER APPLICABLE LAW, TWO TRIANGLE CONSULTING GROUP, LLC WILL NOT BE LIABLE FOR THE QUALITY, ACCURACY, COMPLETENESS, RELIABILITY OR TIMELINESS OF THIS INFORMATION, OR FOR ANY DIRECT, INDIRECT, CONSEQUENTIAL, INCIDENTAL, SPECIAL OR PUNITIVE DAMAGES THAT MAY ARISE OUT OF THE USE OF THIS INFORMATION BY YOU OR ANYONE ELSE (INCLUDING, BUT NOT LIMITED TO, LOST PROFITS, LOSS OF OPPORTUNITIES, TRADING LOSSES, AND DAMAGES THAT MAY RESULT FROM ANY INACCURACY OR INCOMPLETENESS OF THIS INFORMATION). TO THE FULLEST EXTENT PERMITTED BY LAW, TWO TRIANGLE CONSULTING GROUP, LLC WILL NOT BE LIABLE TO YOU OR ANYONE ELSE UNDER ANY TORT, CONTRACT, NEGLIGENCE, STRICT LIABILITY, PRODUCTS LIABILITY, OR OTHER THEORY WITH RESPECT TO THIS PRESENTATION OF INFORMATION.
For more information, visit our Disclaimer: www.goldmanresearch.com