Focus Media Shares Popped: 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 Chinese advertising specialist FocusMediaHolding (NAS: FMCN) climbed 15% on Tuesday, a day after increasing the limit of its buyback program from $450 million to $650 million.
So what: We Fools love stock buybacks, as they serve to reduce the number of shares outstanding and, in turn, increase earnings per share and the percentage stake that shareholders have in the company. The stock has been absolutely pummeled recently on growing fears about China, so the announcement also serves as a much-needed boost of confidence from management.
Now what: Don't let the pop prevent you from looking into the stock. Even with today's rally, Focus Media shares are still down a whopping 40% over just the past two weeks and continue to trade at a single-digit forward P/E. When you couple those cheapish metrics with CEO Jason Jiang's comment that "repurchasing at the current price level would be highly accretive to shareholders," Focus Media seems like a real bargain worth checking out.
Interested in more info onFocus Media?Add it to your watchlist.
At the time this article was published Fool contributor Brian Pacampara owns no position in any of the companies mentioned. 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 Fool's disclosure policy always gets a perfect score.
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