DryShips (DRYS) – Bottom Fishing Time

DryShips has been beaten down badly due to poor BDI index. However it may been a good time to do bottom fishing on DRYS in anticipating the economy recovery and also many countries need coal for the winter period. Such activities will increase the dry bulk shipping demand and thus drive the BDI index up. DRYS stock price has very high correlation with the BDI index. DRYS hit US$130 and US$115 respectively when BDI hit the peak (> 10,000) in Nov 2008 and May 2009.

Currently DRYS is trading about US$4.00 and current BDI index is about 1,700. If you look at the downside risk (lowest is US$2.72) versus the upside potential (historial high US$130), it looks very attractive for long term investment. However, if the economy does not recover as per plan, BDI will drop further. Is it worth the gamble? Your Call!

This Post Has 2 Comments

  1. Fong

    Hi Marubozu,

    The BDI has trended up recently and is just over 2000 last Friday. Please post your readings about DRYS trend in the short term like next 3 months. Thank you.

Leave a Reply