This article highlights the broad-market patience among the investing crowd, who have "learned to take lavish fleets of corporate jets and outlandish executive bonuses more or less in stride" during the past year. However, the Motley Fool argues that DryShips (DRYS: sentiment, chart, options) shareholders have taken it on the chin more than most, thanks to the shipping issue's "triple play share dilution."
While it would be easy for the Street to forgive DryShips' latest dilutive transgression, the columnist says, controversial CEO George Economou "does not have a clean track record." In fact, some of his fellow shipping execs agree, including Genco Shipping (GNK) Chairman Peter Georgiopoulos, who once suggested that Economou is "play[ing] games with their shareholders' money." On that same note, the author points to a recent warning from Anastassis Margonis, president of Diana Shipping (DSX), who cautioned that his peers' insistence on proceeding with orders for new vessels could end in "disaster for the shipping markets."
The Fool seconds Margonis' theory; according to the article, the impact of failed ventures could result in an "unwelcome domino effect rippling through banks, shipping companies, and even the shipyards." In fact, says the writer, with vessels selling for a 60% discount and bankruptcies a growing possibility, the sector's "weak medium-term outlook" is becoming more evident.
Technically speaking, the shares of DRYS have sailed higher recently, outperforming the S&P 500 Index (SPX) by an impressive 46% during the past 60 trading sessions. The best stock for 2010 is now attempting to find a foothold in the 5 region, home to its 10-week moving average, which hasn't been breached on a weekly closing basis since mid-March. Furthermore, the June 5 strike is home to roughly 12,000 open put positions, which could provide options-related support in the near term.
On the sentiment front, not everyone agrees with the Fool's humdrum outlook for DRYS. In fact, just this week, brokerage firm Dahlman upgraded the stock to "hold" from "sell." Plus, there could be more where that came from, as Zacks reports that only one of the six ranking analysts rate DRYS a "buy" or better. In addition, Thomson Reuters pegs the average 12-month price target on the top stocks for 2010 at only $4.79, representing a 24% discount to the security's intraday high today.
Should fundamental concerns ease and the stock's muscle on the charts continue, the bears among the brokerage bunch could abandon ship. A fresh wave of upgrades and/or price-target boosts could help DRYS sail higher in the near term.
|Highest Option Volume for the Week Ending Monday, May 18, 2009|
|Ticker Symbol||Call Volume||Put Volume||Total Volume*||Put/Call Ratio|
|Bank of America Cp(BAC)||393,026||170,308||563,334||0.43|
|S&P 500 Index(SPX)||238,569||205,343||443,912||0.86|
|Nasdaq 100 Index Trckng Stck(QQQQ)||184,431||183,044||367,475||0.99|
|Ishares Russell 2000 Index(IWM)||71,355||172,664||244,019||2.42|
|Sel Sec Spdrs Fd Financial(XLF)||57,824||72,371||130,195||1.25|
|General Electric Co(GE)||49,689||33,673||83,362||0.68|
|Russell 2000 Index(RUT)||42,769||39,613||82,382||0.93|
|Highest Option Volume Compare to Average Volume|
for Week Ending Monday, May 18, 2009
|Ticker Symbol||Call Volume||Put Volume||Total Volume*||5-week Avg Volume||Volume Ratio||Put/Call Ratio|
|Bp Plc (BP)||1,437,817||19,859||1,457,676||413,244||72.40||0.01|
|Cnooc Ltd (CEO)||178,467||1,618||180,085||47,250||110.30||0.01|
|Ei Dupont De Nemours Co (DD)||299,073||10,013||309,086||87,258||29.87||0.03|
|Emerson Electric Co (EMR)||216,535||6,829||223,364||69,718||31.71||0.03|
|GeoEye Inc (GEOY)||8,427||9,557||17,984||5,535||0.88||1.13|
|Plum Creek Timber Co (PCL)||187,662||1,476||189,138||51,346||127.14||0.01|
|Petrochina Co (PTR)||675,148||4,194||679,342||175,857||160.98||0.01|
|SAP AG (SAP)||186,251||22,013||208,264||61,769||8.46||0.12|
|Total SA (TOT)||173,672||882||174,554||46,391||196.91||0.01|
|United Technologies Cp (UTX)||421,816||12,204||434,020||133,339||34.56||0.03|