Polaris Industries Shares Plunged: 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 off-road-vehicles builder Polaris Industries (NYS: PII) went way off the beaten path today, sinking 11% deep in market sludge on heavy trading volumes.

So what: Polaris beat analyst estimates in last night's third-quarter earnings report and raised full-year guidance figures -- but the higher projections add up to a significantly weaker fourth quarter than had been expected once you factor in the size of this quarter's positive surprise. So this is a case of too much good news, too early, and no follow-through.

Now what: The company competes chiefly with Arctic Cat (NAS: ACAT) and Harley-Davidson (NYS: HOG) , and the Hogfather's own gloomy report yesterday didn't help any. That said, don't cry for Polaris shareholders. The stock has crushed the market over the last year, or three, or 10, all while showering investors in healthy dividends. I think it's safe to see this drop as a rare buy-in opportunity, because one potentially weak quarter will soon be forgotten while rock-solid margins and growth trends live on.

Interested in more information about Polaris Industries? Add it toMy Watchlist.

At the time thisarticle was published Fool contributorAnders Bylundholds no position in any of the companies discussed here. We Fools may not all hold the same opinions, but we all believe thatconsidering a diverse range of insightsmakes us better investors. You can check outAnders' holdings and a concise bio, follow him onTwitterorGoogle+, or peruseour Foolish disclosure policy.

Copyright © 1995 - 2011 The Motley Fool, LLC. All rights reserved. The Motley Fool has a disclosure policy.