Why Gentex Shares Got Crushed

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 auto-parts maker Gentex (NAS: GNTX) plunged 15% on Thursday after the company's quarterly sales and guidance disappointed Wall Street.

So what: Gentex's first-quarter EPS managed to meet estimates, but a top-line miss -- $290.7 million versus the consensus of $294 million -- is reinforcing investor fears over slowing growth. In fact, the stock is hitting a new 52-week low on the news and is down nearly 30% year to date.  

Now what: Don't expect the stock to turn anytime soon. Management expects second-quarter sales to grow a respectable 15%, implying a top line of about $280 million, but that was also below Wall Street's view of $287.4 million. Of course, with the stock now trading at a reasonable forward P/E of 14, long-term investors might want to take advantage of this short-term turbulence.  

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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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