During the market correction yesterday, we went about 5% more on margin to purchase shares of DryShips Incorporated (DRYS) at $19.30 per share. As one of the largest dry bulk carriers, DryShips owns a fleet of 54 dry bulk carriers. They also own 6 UDW drilling units through their subsidiary Primelead, which is expected to be spun-off within the next six months. The company took advantage of the spot market as the BDI increased between 2006 and 2008, but shifted to fixed rate contracts as the year progressed. At this point 61% of the vessels have an average remaining term of 5 years. The BDI index has plummeted but the fixed contracts should limit the decrease in cash flow. We wrote about our missed opportunity with DryShips in 2005 when the stock was hovering in the teens, but the market correction has essentially given us another opportunity.
Below is our updated portfolio:
| Stock | Buy Date | Buy Price | Current Price | Current % Of Portfolio | Unrealized % Return | Yield as % of BOY Portfolio Value Plus Deposits |
| Altria (MO) | Various | 16.69 | 17.38 | 4.46 | 4.16 | 0.13 |
| Philip Morris International (PM) | 1/4/2005 | 32.19 | 39 | 6.09 | 21.15 | 0.13 |
| Kraft Foods (KFT) | Various | 24.03 | 27.70 | 4.74 | 15.25 | 0.09 |
| Plum Creek Timber (PCL) | 5/12/2005 | 35.5 | 40.62 | 10.43 | 14.41 | 0.23 |
| Pfizer (PFE) | Various | 24.37 | 15.67 | 6.71 | (35.69) | 0.24 |
| ICICI Bank (IBN) | 5/18/2006 and 08/01/2008 | 28.30 | 17.35 | 5.94 | (38.70) | 0.04 |
| Taiwan Semi (TSM) | 7/27/2006 | 8.71 | 7.61 | 6.51 | (12.53) | 0.12 |
| Advantage Energy Fund (AAV) | 11/2/2006 | 11.22 | 5.4 | 3 | (51.89) | 0.20 |
| SunTech Power (STP) | 3/14/2007 | 36.73 | 23.88 | 4 | (36.34) | None |
| Central Europe & Russia Fund (CEE) | Various | 51.03 | 22.02 | 4.71 | (55.04) | 0.55 |
| Patni Computers (PTI) | 8/10/2007 | 20.85 | 6.20 | 2.65 | (70.29) | 0.17 |
| Itron Inc. (ITRI) | 11/07/2007 | 85.01 | 71.13 | 6.09 | (16.43) | None |
| Anthracite (AHR) | 11/09/2007 | 7.97 | 2.35 | 2.01 | (70.51) | 0.17 |
| ClickSoftware (CKSW) | 11/09/2007 | 4.61 | 2.35 | 2.01 | (49.02) | None |
| Harvest Energy (HTE) | 11/28/2007 | 21.01 | 8.56 | 2.93 | (59.27) | 0.26 |
| iRobot (IRBT) | 12/18/2007 | 18.65 | 10.32 | 3.53 | (44.19) | None |
| MCG Capital (MCGC) | Various | 10.86 | 0.70 | 0.48 | (93.56) | 0.05 |
| LDK Solar (LDK) | 01/22/2008 | 30.49 | 20.53 | 5.27 | (32.67) | None |
| Aegon N.V. (AEG) | 04/28/2008 | 15.99 | 5.30 | 2.72 | (66.85) | 0.09 |
| LM Ericsson (ERIC) (AEG) | 05/05/2008 | 11.83 | 6.17 | 4.22 | (47.83) | 0.08 |
| TD Ameritrade (AMTD) | 05/21/2008 | 17.68 | 12.35 | 4.23 | (30.17) | None |
| Trina Solar (TSL) | 06/06/2008 and 07/31/2008 | 45.61 | 11.56 | 2.47 | (72.55) | None |
| Costco (COST) | 08/01/2008 | 62.28 | 54.40 | 4.66 | (12.65) | 0.03 |
| Frontline Limited (FRO) | 10/06/2008 | 36.95 | 32.78 | 4.21 | (11.27) | 0.71 |
| DryShips Incorporated (DRYS) | 10/09/2008 | 19.30 | 19.09 | 4.90 | (1.10) | 0.11 |
| Cash | (9.57) | |||||
| Total Portfolio | (39.83) | 3.23 |
- For SunTech Power (STP), we wrote covered calls for 2008 Dec 50 on 06/06/2008 at $5.20.
- For Taiwan Semi (TSM), we wrote covered calls for 2008 October 12.5 on 4/21/2008 at $0.45.
- For Altria and Philip Morris International, assumed spin-off ratio of 30.83:69.17. Altria is yet to supply the cost-basis info
- For Plum Creek Timber (PCL), we wrote covered calls for 2008 November 50 on 06/03/2008 at $1.70.
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