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 flooring manufacturer Mohawk Industries (NYS: MHK) were hitting the ceiling today, gaining as much 10% in intraday trading before giving much of it back.
So what: For the second quarter, Mohawk reported total revenue of $1.5 billion and adjusted earnings per share of $0.95. Both the bottom and top lines topped Wall Street's expectations, which pegged the company's quarter at $1.45 in revenue and $0.93 in per-share profit. Though the U.S. economy and residential real estate market have been soft, the company has managed to grow sales and squeeze out more profit through cost reductions and productivity gains.
Now what: It might seem strange to invest in a company so tied to real estate at a time when the market is so bad, but often it's when things look bad that it's the best time to buy. If the broad market weren't in full-on freak-out mode recently, it seems likely that Mohawk's stock would have held onto a much larger gain today. For investors that have it on their radar, that could spell a buying opportunity.
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