Globe Specialty Metals 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 Globe Specialty Metals (NAS: GSM) sank 12% today after the company released earnings.

So what: Sales in the fourth quarter grew a measly 2% to $175.9 million but easily topped analyst estimates of $166.7 million in revenue. But adjusted earnings per share of $0.28 fell short of the $0.31 analysts were expecting, and shares have taken a beating as a result.

Now what: The tornadoes in April and planned outages had a negative impact on shipments and therefore earnings in the quarter. After beating estimates each of the last four quarters, an earnings miss is a letdown and adds questions about what we could expect next year. I think the market is overreacting a bit to a pretty decent earnings report, especially given the company's forward P/E ratio of under 11.

Interested in more info on Globe Specialty Metals? Add it to your watchlist.

At the time thisarticle 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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