DryShips (DRYS) has been in the news of late, taking traders on a wild ride. Last week the company was notified that it was in breach of its financial terms on a large chunk of debt and the company announced it would dump stock and cancel ship orders to preserve liquidity. The stock plummeted more than 50% in just 3 trading days….
On Tuesday, the stock got a reprieve when it announced an agreement with Piraeus Bank to restructure two of its loan facilities in order to regain compliance, resulting a swift recovery rally. DRYS is a favorite of traders, but I prefer to take a look at its competitors - TBSI International (TBSI), Diana Shipping (DSX), Excel Maritime (EXM)& Genco Shipping (GNK).
All broke out yesterday with heavy volume and could gap up this morning. Be very careful about chasing these particularly in this market. Be patient and wait for your price. Diana Shipping (DSX) is probably the safest of the group while Genco Shipping has problems of its own having recently suspended the dividend and share buyback. It should be noted that most of the shippers have suspended their dividend, but as far as I know Excel Maritime (EXM) is still paying out.
Yes, the shippers have problems but these are technical trades of a few weeks. They look quite bullish in the short term.
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