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One Big Red Flag After DryShips Earnings

Friday - 5/24/2013, 2:56am  ET

Blake Bos is bearish on DryShips  and here's why. The company generates about $113 million in cash flow per quarter. Of that, $56 million goes to interest expenses, and the remaining $57 million goes to capital expenditures. Simply stated, $57 million for DryShips isn't going to cut it. This low level of cap ex crimps the company's ability to modernize its fleet with fuel-efficient ships, and that, in turn, puts DryShips at a competitive disadvantage. In fact, if you want to invest in a shipping company, a better alternative is Diana Shipping , with a more modern and fuel-efficient fleet than DryShips.

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