Cogent Communications' 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 network services provider Cogent Communications (NAS: CCOI) jumped as high as 12% on very high afternoon trading volume, then trailed off to a more modest 5% gain.

So what: CEO Dave Schaffer went live on CNBC to explain what Cogent does. Watching Cogent charts on that show, you could literally see how Schaffer's presentation goosed share prices in real time.

Now what: The takeaway from that video is that Cogent is growing sales, increasing margins, and hiring more technical and sales staff to support further growth. You really can't fault investors for getting excited about a message like that. Even Warren Buffett's anointed successor to the Berkshire Hathaway (NYS: BRK.A) (NYS: BRK.B) empire holds a large interest in the stock. Level 3 Communications (NAS: LVLT) and AboveNet (NAS: ABVT) may want to take note of this rising rival -- or perhaps prepare to make buyout offers.

Interested in more info onCogent Communications? Add it to your watchlist.

At the time this article was published Fool contributorAnders Bylundholdsno position in any of the companies discussed here.The Motley Fool owns shares of Berkshire Hathaway.Motley Fool newsletter serviceshave recommended buying shares of Berkshire Hathaway. Try any of our Foolish newsletter servicesfree for 30 days. We Fools don't all hold the same opinions, but we all believe thatconsidering a diverse range of insightsmakes us better investors. The Motley Fool isinvestors writing for investors.

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