51job Shares Plunged, Then Recovered: 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 51job (NAS: JOBS) fell 11% in early trading but closed down just 2% as investors appear to have realized that the long-term growth story remains intact.

So what: Just look at the second-quarter results. Revenue increased 27% to $51.4 million while profit improved to $0.44 a share, and was up 45% when calculated in the company's native currency -- the Chinese yuan.

Now what: So why the selloff? Analysts were looking for $0.50 a share in profit in Q2. So be it. As my Foolish colleague Rick Munarriz wrote earlier today, 51job may not be cheap at 29 times this year's projected earnings, but its shift to end-to-end human-resources products and services should deliver plenty of growth to justify the price. Do you agree? Disagree? Weigh in using the comments box below.

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At the time this article was published Fool contributorTim Beyersis a member of theMotley Fool Rule Breakersstock-picking team. He didn't own shares in any of the companies mentioned in this article at the time of publication. Check out Tim'sportfolio holdingsandFoolish writings, or connect with him onGoogle+or Twitter, where he goes by@milehighfool. You can also get his insightsdelivered directly to your RSS reader.Motley Fool newsletter serviceshave recommended buying shares of 51job. Try any of our Foolish newsletter servicesfree for 30 days. We Fools don't all hold the same opinions, but we all believe thatconsidering a diverse range of insightsmakes us better investors. The Motley Fool has adisclosure policy.

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