Growth story could sail again -- buy DryShips (DRYS)

Filed under: Russia, Bargain stocks, Stocks to Buy

They say that the higher you climb, the harder you fall. Well that has certainly been the story of freight carrier DryShips (NASDAQ: DRYS).

A glance at the stock's two-year chart is likely to cause more than just nausea.

In 2007, shares of DRYS rallied hard on the heels of the global growth story. Chinks in the armor began to appear in the fall of that year, and DRYS sold off some of its gains. By the end of that year, shares had lost 20% of their value from the peak.

The world economy was tied tighter to the U.S. economy than most believed. Even worse, the large amount of hedge fund money in the stock ultimately resulted in the stock's demise.

And what a demise it has been.

Shares of DRYS collapsed this year amid a slowing economy and the credit crisis. Prices for bulk goods fell like a rock at a time when new ships meant more capacity.

It was a recipe for disaster, but what about now? Is DRYS a bargain trading for less than $5 per share?

On Monday, with the news of a massive stimulus plan being advocated by the President-elect, DRYS turned on a dime. Following through yesterday, the stock is up some 30%.

Continue reading Growth story could sail again -- buy DryShips (DRYS)

Growth story could sail again -- buy DryShips (DRYS) originally appeared on BloggingStocks on Wed, 10 Dec 2008 12:45:00 EST. Please see our terms for use of feeds.

Permalink | Email this | Comments