Why Lamar Advertising's Shares Popped

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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 billboard giant Lamar Advertising (NAS: LAMR) were displaying hefty gains today, rising as much as 14% in intraday trading after the company reported second-quarter results.

So what: There wasn't much that was too surprising about the numbers in Lamar's second quarter. The company's revenue, which was up 4% from last year, did edge out analysts' expectations, but earnings per share of $0.15 were right in line with estimates. That $0.15 tally was up 25% from $0.12 last year.


On the downside, Lamar's third-quarter revenue forecast was a range between $303 million and $306 million. The Wall Street consensus was $307 million.

Now what: What likely has investors bidding up shares, however, was Lamar's disclosure that it's considering electing to be treated as a real-estate investment trust, or REIT. The move -- if approved by the U.S. Internal Revenue Service -- could have favorable tax consequences for the company. For investors, it could mean more cash coming their way, as REITs are required to pay out 90% of their profit.

Want to keep up to date on Lamar Advertising?Add it to your watchlist.

The article Why Lamar Advertising's Shares Popped originally appeared on Fool.com.

Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors.Fool contributor Matt Koppenheffer does not have a financial interest in any of the companies mentioned. You can check out what Matt is keeping an eye on by visiting his CAPS portfolio, or you can follow Matt on Twitter @KoppTheFool or Facebook. The Fool's disclosure policy prefers dividends over a sharp stick in the eye.

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