Consolidated Graphics Shares Plunged: What You Need to Know


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 commercial print-service specialist Consolidated Graphics (NYS: CGX) ran out of ink on Wednesday, falling as far as 21.8% on more than four times their average daily trading volume.

So what: In the just-reported first quarter, sales increased by 2.8% year over year to $243 million and adjusted earnings climbed 13% to $0.43 per share -- in both cases far below analyst estimates. Next-quarter guidance was also timid as management outlined mild year-over-year gains on both the top and bottom lines.

Now what: Industry peers R.R. Donnelley & Sons (NYS: RRD) and Quad/Graphics (NAS: QUAD) also saw steep declines on Wednesday while fourth Musketeer Cenveo (NYS: CVO) held up a bit better. It bears mentioning that R.R also missed Street targets today while the other two report earnings next week. Meanwhile, Vistaprint (NAS: VPRT) jumped more than 6% today, making up some lost ground from its own terrible-earnings plunge last week. In short, print services is a deeply troubled industry at the moment, fit for investments only by real risk-chasers and bottom-fishers.

Interested in more info on Consolidated Graphics? Add it to your watchlist.

At the time thisarticle was published Fool contributor Anders Bylund holds no position in any of the companies discussed here. The Motley Fool owns shares of Vistaprint. Motley Fool newsletter services have recommended buying shares of Vistaprint. Yes, we have newsletters that actually focus on high-risk investments. Try any of our Foolish newsletter services free for 30 days. We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool is investors writing for investors.

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