Why Quanex Building Products' 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 Quanex Building Products fell as much as 11% today after the company reported earnings.

So what: The company reported fiscal fourth-quarter revenue 0.9% higher than a year ago at $235 million, below the consensus estimate of $244.9 million. Earnings per share of $0.05 were far below estimates of $0.21, which triggered the massive sell-off today.

Now what: For the full year, revenue fell 2.3%, so the company isn't hitting on all cylinders. The company is hoping the industry returns to more normal conditions next year, but that depends on having a lot of factors coming together to help the economy improve. I think the stock is worth staying away from until we see solid growth and profits return to normal levels. Even at current estimates, shares trade at 35 times next years earnings, which is a steep price for a company that isn't growing.

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The article Why Quanex Building Products' Shares Jumped originally appeared on Fool.com.

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