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September 23, 2007

DryShips is Totally on Fire +650% Since Last Year

posted by MR WAVETHEORY at 9/23/2007 08:14:00 AM
I've been reading the stock tables and DryShips (Nasdaq DRYS) is totally on fire. It is up over 6 fold in the last year! This chart is unreal. Can you believe that this $81 stock was trading at $12 last year?


I wonder how much further this stock has to go given the slowdown in the US. It trades at 13X current year P/E and 7X forward P/E.

A well known investor wrote that the time to buy commodity related stocks is when their P/Es are really, really high - when they are unprofitable. The time to sell is when their P/Es are low - when they reach peak earnings. Commodity related stocks operate on the business cycle.

Has the time arrived to sell for Dryships? Revenues rose over 100% percent last year to $338 million and earnings were $216 million. It trades at an eyepopping 8x trailing twelve month revenues. Sell sell sell?

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