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[ash111]

DRYS An additional valuation Relating previous DD Valuation post ( Heidmar Influence) :

Net-Man  
Friday, 08/18/17 09:28:48 AM
Re: None

Post # of 50187 


If we believe the Heidmar valuation that 49% is worth $100 million, DRYS book value is somewhere around $7-$8 after the VLGC's are paid for. GE has stated 2018 full year ebitda revenue at $77 million. It is unknown at the moment what Heidmar might add to this. Teekay has reported $350/day per vessel managed along with a fee of 1.25% of chartered rate. Assuming Heidmar has a similar rate structure, this works out to gross revenues between $25-$30 million/year. Assuming ebitda would be roughly half of gross and using a 15x pe, this would yield an enterprise value between $187.5-$225 million. Maybe, just maybe shareholders didn't get screwed by GE this time.


http://tankerinvestments.com/wp-content/uploads/2016/08/TIL-Q2-2016-Earnings-Release-FINAL.pdf

Net-Man  
Friday, 08/18/17 09:42:45 AM
Re: ash111 post# 50133

Post # of 50187 


ash - my assumption for 2018 is closer to $100 million ebitda versus the $77. There should be at least $12 million coming from Heidmar and GE's number doesn't account for the improving dry bulk rates. Without any more hocus pocus from GE and shares should trade north of $20 this time next year.

DRYS Valuation: Book Value, NPV, PE comparison 08/15/17 :

Relating transaction deal announced on Friday DRYS book value alone will be about $6/share w/lower Debt (already decreased sharply) and a stream of cash flow years ahead. in this DD, I used also great information posted by
Millstone.

In shortly a few game changing developments announced which means DRYS is going legit in a big way.

1. Toxic Financing is over, "terminated agreement with Kalani Investments". main reason for 99.96% drop.

2. Economou (through Sifnos) gives up his Series D
preferred shares (which carry 100,000 votes per share)- no more decisions without shareholder approval.

3. Repayment of $27 million under the Company’s unsecured credit facility, bringing down DRYS debt by $27 million.

4. Economou acquire $100M shares at $2.75 per share and he won’t be able to sell any of these $100 million worth of shares for the next six months at a minimum.

5. DRYS is getting 49% interest in Heidmar (www.heidmar.com/about/) which according to Heidmar itself is one of the world's leading tanker operators. Entities with tankers pool them under the Heidmar banner, and Heidmar operates and manages them, getting fees in exchange.
Heidmar Tanker Pools; https://www.marinemoney.com/sites/all/themes/marinemoney/forums/MMWeek13/presentations/Wednesday/Wed.10.10Heidmar%20Marine%20Money%20Week_FV_Compressed.pdf btw. Heidmar is owned 49% by financial giant Morgan Stanley.

W/BDI surge and still has lots of upside potential ( BDI was 13x higher at its peak) many sees 2017-2018 as solid years for the whole shipping industry.

Book Value:
I went thru Millstone's Book value calculation, including the 100m transaction (as mentioned in note 4 above), and found it accurate. $6.00- $6.25 PER SHARE IN BOOK VALUE ALONE
Link: Millstone's Book value calculation:
https://investorshub.advfn.com/boards/read_msg.aspx?message_id=133783292

Book Value Doesn't include Revenues and Future revenues and actually represents PE=0.

Average P/E ratio for the entire Transport and Logistics Industry for Q2, 2017 was 24.78 This illustrates very clearly just how undervalued is DRYS comparison to other companies in this industry. See link below.

http://csimarket.com/Industry/industry_valuation_ttm.php?pe&ind=1101

DryShips has bought 17 ships so far this year. four gas carriers alone which being bought this year "represent up to $392 million of future revenue potential". "
When adding the cash flow from these contracts with what it anticipates its unchartered vessels can earn on the spot market, DryShips estimates that its rebuilt fleet can produce $77 million of EBITDA on an annual basis. That would mark a huge shift from last year's loss"..
https://www.fool.com/investing/2017/06/14/dryships-incs-3-biggest-growth-opportunities.aspx

NPV Calculation:
On 15% profit margin, 5% grow rate/year, NPV (20 yrs, 4%) is $240m or $2.1/share. as mentioned above, Average P/E ratio for the entire Transport and Logistics Industry for Q2, 2017 was 24.78. on a conservative PE of only 10, that's over $20/share. also important to note that drys's revenues posted above doesn't include Heidmar revenues (DRYS will have 49% ownership)

"Heidmar has offices in the US, UK and Singapore, and operates a fleet of more than 90 tankers.

Heidmar is the general agent and commercial manager of five pools:

Star Tankers (panamax/LR1 tankers between 55,000 and 75,000 DWT)
Sigma Tankers (aframax/LR2 tankers between 90,000 and 120,000 DWT)
Dorado Tankers Pool (mid-range product tankers between 37,000 and 55,000 DWT)
Marida Tankers (short-range product tankers between 10,000 and 18,000 DWT)
Blue Fin Tankers (suezmax tankers between 140,000 and 180,000 DWT)"

Conclusion:
Heidmar is a private company and should add more value (Steady cash flow, see Heidmar additional value by Net-Man ), combined w/ solid book value of $695,600,000.