1 Stock That Doesn't Deserve Your Money

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In today's edition, industrials editor and analyst Brendan Byrnes discusses Dryships' recent disappointing earnings. The results showed the same story we've been seeing for a while -- a strong Ocean Rig subsidiary coupled with continuing weak and declining dry bulk segment. Drybulk revenue declined 33%, not surprising considering the Baltic Dry Index is getting close to the level that it bottomed at in 2008. Dryships will likely opt to put more ships on the spot market as the company waits for long-term rates to recover. Overall, the dry bulk industry continues to suffer from a severe overcapacity problem. Ironically, the company's Ocean Rig subsidiary is benefitting from the opposite situation. Drilling rigs are in high demand and low supply right now, and Ocean Rig is performing well and is booked for nearly all of 2013. Still, the poor drybulk industry dynamics combined with a historically shareholder-unfriendly CEO and a scary balance sheet leads Brendan to believe that this is a stock long-term investors should avoid. Check out the video below for more. 

Dryships might be a stock that investors should avoid, but that doesn't mean there aren't other terriffic opportunities in the market right now. We've outlined one such stock with tremendous potential in our free report, "The Motley Fool's Top Stock for 2012." In it, our chief investment officer identifies his favorite company for the year. To access the report before the rest of the market catches on, click here -- it's absolutely free.

Austin Smith has no positions in the stocks mentioned above. Brendan Byrnes has no positions in the stocks mentioned above. The Motley Fool has no positions in the stocks mentioned above. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

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