Dresser-Rand Group Shares Surged: 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 equipment maker Dresser-Rand Group (NYS: DRC) jumped as much as 13% today after the company announced a share buyback.
So what: The company will repurchase up to $150 million of stock that it expects to be completed by Wednesday, an unusually short buyback period. Management cited the company's decline in share price, strong balance sheet, and expected strong bookings in the second half of the year for the confidence to buy shares.
Now what: The buyback will reduce shares outstanding by approximately 5% once it is complete. While management fell short of increasing guidance their statement indicated a strong belief the company might win some large projects in the second half of the year that could drive earnings higher than expected. I don't see anything but bullish signals today but might wait for a little pullback before jumping into shares at the high point.
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At the time this article 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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