Masimo 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 medical-device maker Masimo Corp. (NAS: MASI) fell as much as 10% in early trading today after reporting slower-than-expected Q2 sales growth.

So what: Revenue improved just 9% in the second quarter, rising from $100.1 million in last year's Q2 to $109.6 million this year. Wall Street wanted $111.3 million. The good news? Earnings rose 17% to $0.28 a share, about even with analyst expectations.

Now what: Investors nevertheless sided with Wall Street in selling the stock today. Yet they could be acting prematurely. Masimo trades for a slight discount to the long-term earnings growth that analysts expect -- a potential bargain, assuming bottom-line growth holds up. Do you find today's prices appealing? Are you selling? Weigh in using the comments box below.

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

At the time thisarticle 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.Try any of our Foolish newsletter servicesfree for 30 days. We Fools may not 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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