Why Wabash National Shares Dropped and Then Recovered

Before you go, we thought you'd like these...
Before you go close icon

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 truck trailer-maker Wabash National (NYS: WNC) fell as much as 11% before bouncing back today after the company reported second-quarter earnings.

So what: The sudden drop and recovery seemed to come from a misunderstanding in earnings, as sources said the company made just $0.06 per share versus projections of $0.22 after it released its results yesterday. In reality, the company earned an adjusted profit of $0.23 per share, and on the call management also highlighted the acquisition of Walker Group Holdings, which helped drive a 35% increase of revenue to $362 million and a gain of almost 70% in operating income.


Now what: Shares finished the day down less than 2%, meaning the initial reaction was essentially irrelevant. Considering the company is operating in a sector where many of its peers have reported revenue losses this quarter, investors should be heartened by the report. Wabash looks like an excellent value play right now, with solid growth prospects thanks in part to the acquisition of Walker, and a backlog of $713 million to ensure cash flow comes in. Unlike many of its peers, Wabash has no exposure to Europe, which makes it look like a good bet going forward.

Want to ride with Wabash? Add it to your Watchlist.

The article Why Wabash National Shares Dropped and Then Recovered originally appeared on Fool.com.

Fool contributorJeremy Bowmanholds no positions in the companies in this article. We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. Try any of our Foolish newsletter services free for 30 days. The Motley Fool has a disclosure policy.

Copyright © 1995 - 2012 The Motley Fool, LLC. All rights reserved. The Motley Fool has a disclosure policy.

Read Full Story

Want more news like this?

Sign up for Finance Report by AOL and get everything from business news to personal finance tips delivered directly to your inbox daily!

Subscribe to our other newsletters

Emails may offer personalized content or ads. Learn more. You may unsubscribe any time.

From Our Partners