DryShips' Shares Dropped: What You Need to Know

Although we don't believe in timing the market or panicking over market movements, we do like to keep an eye on big changes -- just in case they're material to our investing thesis.

What: Shares of dry bulk shipper DryShips (NAS: DRYS) fell as much as 12.3% today on above-average trading volume.

So what: The company just released second-quarter results, showing revenue and adjusted earnings well below Street estimates. That said, the deep plunge was brief: Share prices quickly bounced back to a less terrifying 4% overnight swoon, and the stock has gained a market-beating 11% over the past week.

Now what: DryShips has never been a particularly shareholder-friendly company, with the ownership structure set up to benefit CEO George Economou more than regular shareholders. The ongoing process of spinning off oil-drilling subsidiary Ocean Rig UDW as a share dividend to stockholders might temper that image somewhat. But the company remains scary, and the shipping sector as a whole looks no better than the perennially troubled airline industry these days, and that includes higher-quality operators Diana Shipping (NYS: DSX) and Navios Maritime Holdings (NYS: NM) . How do you make a small fortune in shipping stocks? Start with a large one.

Interested in more info on DryShips? Add it to your watchlist.

At the time thisarticle was published Fool contributor Anders Bylund holds no position in any of the companies discussed here. 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 is investors writing for investors.

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