Why Orthofix Shares Got Crushed

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 Orthofix International plunged 16% today after the medical device company postponed the release of its financial results for the second quarter of 2013.

So what: Orthofix said that it needs additional time to review matters related to revenue recognition for prior periods, raising plenty of worry among investors that the company might have to restate its financials. Of course, even if nothing serious is found in the review, the postponement alone might suggest to some that Orthofix's accounting practices aren't exactly on the conservative side.  

Expect the stock to remain under heavy pressure in the short term.

"The Audit Committee cannot predict the length of time or outcome of its review," wrote Orthofix in a statement. "At this time, the Company is not providing annual or quarterly guidance for 2013."

So while it might be a good idea for bargain hounds to start sniffing around the stock, the uncertainty surrounding Orthofix seems a bit too right now to actually bite in.

The best investing approach is to choose great companies and stick with them for the long term. The Motley Fool's free report "3 Stocks That Will Help You Retire Rich" names stocks that could help you build long-term wealth and retire well, along with some winning wealth-building strategies that every investor should be aware of. Click here now to keep reading.

The article Why Orthofix Shares Got Crushed originally appeared on Fool.com.

Fool contributor Brian Pacampara has no position in any stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. 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. The Motley Fool has a disclosure policy.

Copyright © 1995 - 2013 The Motley Fool, LLC. All rights reserved. The Motley Fool has a disclosure policy.

Read Full Story

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.

People are Reading