Insituform Shares Got Crushed: 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 pipeline rehabilitator Insituform Technologies (NAS: INSU) fell another 14% today after being hit hard yesterday.

So what: Yesterday the stock fell on lowered guidance, and today analysts piled on with their own downgrades. Wedbush Securities cut the stock from outperform to neutral after yesterday's disappointment.

Now what: The lower guidance was bad news, but I would brush off this downgrade today. If the company hits the high end of the updated guidance for 2011, shares are trading at 11.5 times earnings, a reasonable value given the company's improved flexibility. I wasn't panicking yesterday and (deep breath) I'm still not panicking today over the move. Short term, the stock may come under pressure, but long term, the business is still solidly profitable.

Interested in more info on Insituform Technologies? Add it to your watchlist byclicking here.

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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