CRInvestor
Long

Buying value in a space little have interest

BATS:DRYS   DRYSHIPS INC
409 6 0
DRYS came up on the WDB Option Model screen recently and frankly when I saw the numbers I nearly fell over. As one of the largest shipping companies around, this company is basically a proxy on Mediterranean shipping and regional commerce in general. Given Europe's current debt woes and Greece in particular, it is not surprising any Greek company is being painted with the same jaundice brush. I am always interested in buying assets at a fraction of their cash value and this is a classic example. With more than $350 million in cash and currently trading at less then annual sales this stock is cheap. Indeed, the stock is currently at .32 times book value. Even at $5.00/share we would still be buying this company well below it's book value....and we are!
08/09/02 DRYS continues to consolidate right at purchase levels & now I am hearing rumblings about the baltic freight index turning up....hmmmmm
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DRYS For The Win!. Fast approaching '1st stop' target (38.2% Fib). Cost basis for stock ownership is $5 (strike price of put option written) - $2.85 (premium collected) = $2.15. At $3.09 was are near a 50% capital gain - and remember, we bought this position on margin (where the premium collected paid for the ongoing margin requirement) so there is no hurry to touch this baby......go DRYS go!
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09/19/13: An absolutely monstrous trade. DRYS has hit and surpassed '1st stop' target (38.2% retrace). Next target is 50% of entire down move or about $4.00. My ultimate target on this trade is a move into the OTE Short sweet spot (70.5% retrace) at or near $5.00. From simply a stock ownership perspective, since our cost to own the stock worked out to just over $2.15/share, any move above the $4.00 area ought to be a level where we should be considering selling at least half the position. By doing so we would basically get all our original investment capital back in our hands and whatever shares remain would represent a 'free ride' on this well respected global company forever.....and forever is a very long time....
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fwiw, OTE short sweet spot hit on 12/23/14 = home run :)
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nailed it head on
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isn't it remarkable how accurate OTE short/long sweet spots are...rediculous....and the options algo I wrote (which generated this trade idea) actually had the market pay us to hold the position....wtf!!!
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