Helen of Troy 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 Helen of Troy (NAS: HELE) had a bad hair day today. Investors reacted negatively to a Q2 earnings report that missed estimates badly. And while some of the damage was erased between the opening and closing bells, at one point Helen's shares had lost 14% of their value.
So what: Perhaps investors wouldn't have been as disappointed in Helen's performance if it hadn't had quite so much potential. Sales at the personal-care and housewares maker were actually up a strong 59% year over year -- yet all the company managed to get from that was a $100,000 improvement in net profit -- and a $0.01 decline in per-share earnings (thanks to stock dilution).
Now what: This is a disappointing performance, to be sure. But I'm not sure it justifies the punishment Helen endured today. At a share price just 8 times its reported net income, Helen still looks reasonably priced to me based on long-term estimates of 10% annual growth.
Will investors ultimately reach the same conclusion?Add Helen of Troy to your Fool Watchlistand find out.
At the time this article was published Fool contributorRich Smithdoes not own (or short) shares of any company named above. We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has adisclosure policy.
Copyright © 1995 - 2011 The Motley Fool, LLC. All rights reserved. The Motley Fool has a disclosure policy.