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Stock of week: DRYS

In general markets are trending downwards due to various bank problems. Last week saw major readjustments for banks like Bank of America and Barclays. It's best to stay away from banks for now.
Now coming to stock of week:
Company: Dryships (DRYS)
Buy price target: $9 to $10
Sell target price in 12 months: $15 (for 50% return)
Background: This was once high-flying stock of shipping industry. No other industry (except financials) would have impacted so much as shipping industry. With worldwide recession, there is less and less need for shipping goods and hence shipping index BDI has come down from 11000 to 800 (for a loss of 94%). However recently BDI has shown some life and has come back from below 800 to above 900. Dryship is an excellent barometer for shipping industry and when economies recover in 9-12 months, shipping industry would recover first and Dryship would benefit. With last week's news about cancelling dividend and ship orders would save company about $1.4B capital which is absolutely right step in this economy. This news caused stock to come from $14 to below $10. Now that all bad news is already priced in, this provides an excellent opportunity to own this at around $10.
Good luck and have a good weekend !
/Shyam

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