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4 more trading days in 2017. Wonder where DRYS will close next week?
BDI up 300+% YoY. Typical slowdown period for shipping. Who do you think is loading/unloading ships during the holiday period? Do you honestly believe there aren't ships idling this time of year? What do you think a an increase in supply of ships and reduced demand might do to spot rates?
Or perhaps it is more about the cyclical nature of the shipping industry. 1Q will be lower with less shipping due to holidays and then weather. Look back over the historical chart for the BDI and you'll see it more clearly. Throw into that mix the fact that there are still too many ships with more on order. Scrapping needs to continue along with an improved worldwide economy.
Low volume time of the year. This is where shorts make money.
To put things in perspective at a macro level, the BDI was at 946 this time last year versus 1547 as of yesterday or a 615 improvement YoY. Worldwide GDP is expected to grow again in 2018, which will drive additional shipping demand.
From a DRYS perspective, they have low debt and stability from several long-term contracts. Half of the ships are working at spot rates, which also seemed headed higher. The major drag on DRYS at the moment are the 6 laid up ships in the OSV fleet. Although I expect GE to end up with those ships on the cheap, his buying them should put something back into the coffers.
And then there is Hiedmar. It seems clear from 3Q financials that DRYS once again over paid for this unit. With that said though, what is its value? There was no hint in the financials about any revenue. While it is a cipher at the moment, the question remains what revenue will be generated by the unit?
After removing the $7.6MM one time charge from the 3Q report, net revenue would have come in around ($10MM). Assuming a min gross of $40MM for this quarter, net should be around break even. That would account for the 2 Panamax ships being out of commission for most of the quarter. So adding those back into the mix next quarter along with the 4th VLGC sometime in January should get DRYS back to net profits. The wrinkle, of course, is that 1Q is historically a lull in the shipping sector given all of the holidays and weather in Asia. DRYS has always had their ships busy, but spot rates trend lower during the quarter.
I am guessing around $42-$44 million gross for this quarter. That number attempts to account for the repair costs for the 2 grounded P-max with $0 associated revenues.
On a fast track perhaps 6-8 months.
Sam - Short answer is yes I have purchased shares. It is a transfer between brokerages.
Knowing Brian, i would not expect anything regarding a relisting to take place until there are at least 10 machines under contract and with money in hand.
Anyone calculated out what DRYS 4Q might look like?
Bid is still .001 per share. If anyone wants to clear their loss this year, let me know.
The BDI is cyclical and moves around based on seasonal shipping demands. Look for Asian holidays to also play a big part after the first of the year.
I am not clear why you are trying to make a direct connection between FFR and BDI. The first is to manipulate inflation and monetary policy in the US. the second is driven almost entirely by supply and demand and the world's economy. Perhaps if you tied BDi more closely to China and their economy a more direct link could be formed.
Not everyone feels that way Charlie. Tax season is coming and the are likely some that would like to cover big gains this year.
Still offering $1000 for each million share lot.
TKL - Not kidding. The machine was purchased second hand though so it didn't show up on the radar directly. Not entirely clear how the machine is being used. My guess is it is for hemp production though.
Maybe something new will help a few of the ships. For the most part the sulfur regs need either more expensive bunker fuel or a very expensive upgrade. I haven't seen anything cheap, yet, for the ballast systems. Unless spot rates go through the roof, my guess is there will be both scrapping and upgrades depending on vessel age. Both bring a reduction in supply. Scrapping for the obvious reason. Upgrades require docking for some amount of time, which translates into less tonnage available. Both of these lead to lower tonnage available and would move spot rates higher even for a short-term period. Between sulfur and BWTS upgrade, owners could spend $4-$6 million. That could easily be 50+% of the ship's value. Tough choice to make to either scrap and buy new or upgrade.
Increasing worldwide GDP will likely have a more direct impact on shipping rates. Over the next 2-3 years, BWTS and sulfur regulations could have the biggest impacts going forward. Both are expensive and the decisions will be made to upgrade newer, more expensive ships and scrap those 15-20 years of age. Scrap prices today are the best they have been in years. Some owners may decide to scrap now and place orders that won't be delivered for 2-3 years. If even 2% of the fleet is scrapped it would cause a profound shift in the supply/demand intersection and spot rates would be significantly higher.
Time will tell, of course. For today though, spot rates are as high as they have been in over 3 years. Without all of the one time charges, DRYS should post a profit in the 3rd quarter. Still waiting to see whether Heidmar helped DRYS shareholders. It clearly benefited GE.
Sam - some restaurants and bars will accept Bitcoin. Crypto currencies are coming though. There are already apps for your phone that allow you to send money to someone else directly. Crypto currency apps probably are not too far behind.
Sam - LOL. Picture when you finally sell your FASC shares for mega millions what will you do with the money? Hiding it in a Swiss bank is out as many found out 2 years ago. So what to do? Well, crypto currencies provide an excellent way to move money around the world or simply store it in your pocket. Because of the block chain technology used, no one knows it's your money and it can't be traced to you or from you. Spend it how you choose without those pesky borders, exchange rates, or anyone looking over your shoulder. Now go back 2 years to all of the people that were outed by the Swiss. What do you think they did with their cash? Think crypto currencies. Et viola Bitcoin becomes a wee bit more important.
Sam - there is a company in Ontario I believe that is using a KDS to process weed. Haven't checked up on them in a few months and will see what I can find out. With that statement alone if FASC was still listed the pps would probably be over a buck!
GM Sam - So, things are still moving along with new projects. FASC is, as always, hostage to someone else writing checks though. One of the projects is working through legal and is taking longer than expected. A $65 million dollar deal might take longer than ordering a burger. All I keep hearing from the people that own the project is "we are getting closer". Take that for what its worth.
Of course, if anyone is simply tired of hanging out with FASC, I am willing to buy shares: $1000 for every million shares.
Can't think of too many reasons why DRYS won't continue to advance. BDI is up and there is some noise in the off-shore market that could reemploy the 6 laid up ships. All other vessels with 2 exceptions are employed and making money.
The site was available last week. They took their time announcing it. I found the code of ethics and conduct page especially humorous.
ValuHunter - read further this morning an pd realized I had stopped at the first section and made a wrong connection with ORIG.
According to the balance sheet and associated notes, DRYS is still reporting a $34 million investment in ORIG. Page f2 and note 8
Sam - Unclear what the status of the financing is at this point. One project is on hold at the moment. 2 others appear to be moving forward. Oddly enough, the hurricanes in Texas and Florida had larger impacts than previously thought. I know for a fact that another new project is being held up due to limited resources (people) to move it along.
Drybulk TCE for 3Q was $8,557. Panamax rates today are $10,277 and Capes are at $22,468. Rates have held strong all this quarter, which is adding to DRYS revenue every day. With the one exception, the offshore fleet, all of DRYS ships are operating well into the green this quarter.
3Q report was more or less on track. 2 notable surprises were the high, one time fees and the lack of Heidmar.
Seems to me that DRYS is more or less on track as expected. While they have a number of long-term charters that make those ships profitable, the remainder are dependent on spot prices. Those prices have moved up significantly this year, but have a ways to go just to catch up with the average. The BDI needs to almost double from here to get to average. The world's economy is growing at a faster pace and will increase shipping demand and in turn spot prices. Do your own calculations of what DRYS 4Q revenue will be. Perhaps their story isn't quite so gloomy.
PM: pps=$4.13 $4.10 bid $4.14 ask vol=24000
Easy to forget $10 million in dividend payouts in 2017. Time to start calculating what 4Q results will look like now there is more information available. Simply reducing the $18 million loss by the $7.6 million one time payment means DRYS will need to achieve roughly $10 million in additional revenue, reduce costs, or some combination to break even this quarter. Instead of 111 days of VLGC revenues, this quarter will have some 360 days revenue contribution or about $4 million net revenue addition. With spot rates higher this quarter, can DRYS other ships close that gap? And then there is Heidmar. What contribution is that adding?
$7.6 million in fees didn't help, but at least was a one time hit. Spot rates have been running higher in 4Q versus 3Q, which implies higher revenues in this quarter. Add in the third new VLGC and full participation of the the second and DRYS should easily post top and bottom line numbers in green. And then there is Hiedmar. That's a big cipher right now. Will it add anything in the quarter?
There are no direct references to Heidmar. DRYS did report $80 million for other current and non-current assets. Don't know if that is supposed to be how they booked Hiedmar or if it is something else.
VLGC payment likely. The $7.6 million in placement fees came as a surprise. Where it was a one time payment, 4Q should look very positive.
Adjusted ebitda -$1.187 million. Almost breakeven. They recorded $7.6 million with a one time charge: "Loss on private placement". Haven't found any references to Heidmar yet.
At this point, 3Q doesn't look too bad.
Revenue just shy of $30 million on the quarter. Improving spot rates and long term charters should move DRYS 2018 well beyond GE's guess last April of $77 million.
What is known today is that DRYS pops isn't even close to book value. What the ER will provide is a more clear understanding of revenue streams along with operating costs. There are some unknowns with Heidmar and the VLCC. What are they contributing. Given the known charter rates and spot rates, it seems very likely DRYS will report positive net earning. Say what you will, but if that does happen the pps should move up rapidly.
BDI up this morning. If it follows the seasonal pattern, it should continue moving up for the next several weeks.
This could have a sharp upward bounce today as shorts close positions ahead of the weekend.
Up 6.91% pre-market