Valspar Shares Popped: 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 paint company Valspar (NYS: VAL) opened Monday trading up 11% after its quarterly results topped Wall Street expectations.

So what: Unfortunately for Valspar investors, the stock quickly erased most of those gains within the first half-hour of trading and is only up about 2% at the time of publication. While the company managed to post a solid third-quarter (adjusted earnings per share of $0.80 versus the analyst consensus of $0.79), the forward-looking Mr. Market seems disappointed that management simply reaffirmed, and didn't raise, its full-year guidance.

Now what: I'd look into Valspar as a possible value pick. The stock is down more than 20% over the past three months alone, sports a cheapish forward P/E of 10, and boasts a solid dividend yield of roughly 2.5%. Given Valspar's leading competitive position in several markets and exciting emerging market expansion, the current valuation seems more than reasonable.

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At the time thisarticle was published Fool contributorBrian Pacamparaowns no position in any of the companies mentioned. 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 Fool'sdisclosure policyalways gets a perfect score.

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