Why Unisys Shares Popped

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 IT services specialist Unisys climbed 10% today after its quarterly results easily topped Wall Street expectations.

So what: The stock was crushed in late October on concerns over slumping demand, but a wide fourth-quarter profit beat -- adjusted EPS of $0.85 versus the consensus of $0.57 -- reinforces optimism over management's initiatives to cope. Although revenue fell 14% during the quarter, improving technology segment margins, coupled with ongoing debt reduction, are giving Mr. Market good feelings about Unisys' financial position going forward.

Now what: Don't let today's pop prevent you from looking into the stock. "In an uncertain business environment, we increased our profitability and generated significant free cash flow," said Chairman and CEO Ed Coleman. "We also continued to enhance our solution portfolio to strengthen our competitive profile. We remain focused on driving profitable growth in the year ahead." With the stock still trading at a cheapish forward P/E of 6 even after today's surge, there might even be some room left to buy into that bullishness.

Interested in more info on Unisys? Add it to your watchlist.

2013 and beyond
The Motley Fool's chief investment officer has selected his No. 1 stock for the next year. Find out which stock it is in our brand-new free report: "The Motley Fool's Top Stock for 2013." I invite you to take a copy, free for a limited time. Just click here to access the report and find out the name of this under-the-radar company.

The article Why Unisys Shares Popped originally appeared on Fool.com.

Fool contributor Brian Pacampara has no position in any stocks mentioned. The Motley Fool has no position in any of the stocks 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 Motley Fool has a disclosure policy.

Copyright © 1995 - 2013 The Motley Fool, LLC. All rights reserved. The Motley Fool has a disclosure policy.