Kraton Performance Polymers 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: I'm having a hard time finding enough adjectives to describe what happened to Kraton Performance Polymers (NYS: KRA) shares today. They were obliterated and are trading 33% lower as I am writing.
So what: Results weren't actually as bad as the stock price drop might indicate. Revenue grew 16% to $386 million, above estimates, and earnings per share were $1.44, just $0.04 short of estimates.
Now what: Kraton is seeing raw material pressures and expects the pressure to continue throughout the year. Still, I'm having a hard time seeing justification for such a dramatic drop in stock price. Right now, shares trade at less than six times 2011 earnings estimates, which looks like a bargain to me.
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At the time this article was published Fool contributor Travis Hoium does not have a position in any company mentioned. You can follow Travis on Twitter at @FlushDrawFool, check out his personal stock holdings, or follow his CAPS picks at TMFFlushDraw.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.
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