Sun Hydraulics' 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 industrial parts manufacturer Sun Hydraulics (NAS: SNHY) lost pressure today, falling as much as 11.7% on what counts as heavy volume for this thinly traded stock.

So what: It was a bad day for heavy manufacturing stocks in general: Sun rival Flowserve (NYS: FLS) fell 6% while sector neighbors Terex (NYS: TEX) and Manitowoc (NYS: MTW) fared even worse. For the record, neither Sun nor any of its known major customers shared any significant news today.

Now what: Sun Hydraulics now trades for just 57% of the 52-week highs that were set after a happy earnings report in May. Much of those gains were wiped out by third-quarter guidance that was as gloomy as the second quarter's was bright. We're looking at a micro-cap stock whose management team doesn't seem to have a handle on market trends -- resulting in a highly volatile stock. Despite a perfect five-star CAPS score, a long history on our Motley Fool Hidden Gems scorecard, and a pleasantly boring business model, Sun doesn't send out rays of sunny, safe investing even at these low prices.

Interested in more information about Sun Hydraulics? Add it to My Watchlist.

At the time thisarticle was published Fool contributor Anders Bylundholds no position in any of the companies discussed here. Motley Fool newsletter services have recommended buying shares of Sun Hydraulics. 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 is investors writing for investors.

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