Long been fans of trading in dry ship companies such as SHIP and DRYS we want to bring to our subscribers attention GNK.

A scan for due diligence revealed the following information:

I’ve seen that the market is quite short-sighted and will often bid a stock to lofty levels based on one or two good years. Based on the current situation, I believe that a company earning over $4 TTM and still making major moves to grow should not be valued under $20. Its stock is mispriced in the short-term, likely caused by the 35 day slump in the BDI.

Longer term, an eventual recovery should see GNK exceeding the $4.73 EPS from 2009, especially with 30% more tonnage capacity in the future. If GNK can pull off $5 in full year earnings in 2012 or 2013 and the market assigns a multiple of only 7, that’s more than a double from current levels. Assigning a multiple of 7 to TTM earnings of $4.48 gives us a value of $31.36 per share.

Three to five years from now, I expect a better economy than we have right now. I expect EPS to exceed $5 at that time. If people are more bullish then, a P/E multiple of 10 would see a price of $50 for GNK. That’s not unfathomable considering the high of $84.51 in May 2008 (more than 29 times 2008 earnings). I know that was during the commodity boom, but I’m only asking for a multiple of 10 instead of 29, which I believe is quite reasonable. A multiple of 12-15 is still not unthinkable and would put it in line for considerably more than a triple from the current level.

I believe GNK is both a solid short-term and long-term play. Both profitable and unprofitable drybulk shippers have been slammed with the recent slump in the BDI. I expect a short-term bounce of 20% to 50% and a possible triple or more within 5 years. Management has done a good job with fleet utilization, achieving almost 100% as of Q1 2010. The growth is quite aggressive, but I believe the acquisitions will contribute nicely to future earnings as long as the debt level is contained.

Suffice to say we believe this might not only be a long time play but also a solid short term one.  Keep tabs on our investment highlights on Twitter and look for new stock commentary on our internet channel. For more information about GNK click this link.

We always believe some of the best investment advice comes from looking at those that are successful around us. The same reason you come to us to find out relative profitable information to help you find the right investments, we also do this by scanning the industry and the experts in the fields and more specifically those that are making ungodly amounts of money.  Case in point….

With the help of our Fool peers here is a quick look at the stocks making it into Warren Buffet’s portfolio.

When it comes to investing, there’s a heck of a lot that Buffett can do that I simply can’t. For instance, back in the fear-filled days of 2008, he wrangled preferred stock yielding 10% from both Goldman Sachs and General Electric (NYSE: GE). He’s also been able to snatch up great privately held companies like See’s Candies and swallow whole public companies such as Burlington Northern Santa Fe. Such is the benefit of a sterling reputation, an eye for bargains, and a massive balance sheet.

But when it comes to common stocks, I can go after the exact same shares that Buffett is buying for Berkshire. And when it comes to one stock in particular, I am most definitely on the same page as Buffett. It’s Berkshire’s largest stock holding. It’s a staple among consumer staples. It is, of course, Coca-Cola (NYSE: KO).

Here are some similar stocks like Coca-Cola that we agree have the merits for us to buy and hold on to.

1. Altria (NYSE: MO) and Philip Morris International (NYSE: PM) may leave a bad taste in some investors’ mouths (no pun intended) since their business is slinging tobacco products. But as far as finding a business with a rock star of a product at its core, these two companies may out-Coke Coke. In the U.S. the Marlboro brand commands an amazing 42% of the cigarette market, and internationally it’s been the top brand since 1972. Marlboro’s 302 billion cigarettes sold internationally in 2009 beat the next three competitors combined.
2. Diageo (NYSE: DEO) could likewise be categorized as “sin stock,” but I’d prefer to categorize it as simply sinfully successful. Just as nothing needs to be done to keep the Coke product successful, Diageo doesn’t need to do much to keep leading brands like Smirnoff, Johnnie Walker, Guinness, Captain Morgan, and Jose Cuervo — to name a few — trucking along. Motley Fool Income Investor advisor James Early recently made Diageo his pick for The Motley Fool’s “11 O’Clock Stock” series, largely because of its amazing brand portfolio.
3. Procter & Gamble (NYSE: PG) doesn’t have a single product that provides the foundation of the company, but instead it has large portfolio of products. P&G does more tweaking to its products than Coke — think about the changes to Gillette razors or innovations for Pampers diapers — but brands like Tide, Vicks, Oral-B, Scope, Zest, and Old Spice don’t need significant technological advancements to keep the dollars rolling in.