Wabash National 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 trucking equipment maker Wabash National (NYS: WNC) are up 11% today after the company announced an acquisition.
So what: The company revealed that it would purchase Walker Group Holdings, a maker of liquid transport trailers, for $360 million. In fiscal 2011 Walker had revenue of $344 million and net income of $28.2 million.
Now what: The deal will immediately add to Wabash's earnings and improve the company's profit margins. Wells Fargo and Morgan Stanley have committed up to $450 million to fund the acquisition. This is a solid purchase for Wabash and should help earnings, but I'm not sure it warrants the pop we've seen in shares today, so I'm not buying the pop.
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At the time this article 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.The Fool owns shares of and has created a covered strangle position on Wells Fargo.Motley Fool newsletter serviceshave recommended buying shares of Wells Fargo. 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.