Why Interface's Shares Jumped

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 Interface (NAS: IFSIA) jumped as much as 20% in early trading after the company reported earnings and got an upgrade from an analyst.

So what: In the first quarter, revenue declined 5.2% to $232.8 million and earnings per share were $0.10, both in line with estimates. Raymond James raised its rating on the company to outperform from a market perform rating, which can be a big driver for small-cap stocks.

Now what: Revenue and earnings were down year over year, something I don't see as a great sign for any company. Management said that business picked up in the second quarter, but I just don't see a reason to buy into Interface here. The stock trades at 15 times forward earnings estimates; after the company missed earnings estimates in three of the last four quarters, I'm staying away from this stock.

Interested in more info on Interface? Add it to your watchlist byclicking here.

At the time thisarticle 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 Motley Fool owns shares of Interface. The Motley Fool has adisclosure policy. We Fools may not all hold the same opinions, but we all believe thatconsidering a diverse range of insightsmakes us better investors. Try any of our Foolish newsletter servicesfree for 30 days.

Copyright © 1995 - 2012 The Motley Fool, LLC. All rights reserved. The Motley Fool has a disclosure policy.