Why InnerWorkings' Shares Dropped

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 marketing supply chain company InnerWorkings fell as much as 12% in early trading, after the company released earnings.

So what: Fourth quarter revenue was up 19%, to $208.0 million, and net income fell slightly, to $5.8 million, or $0.12 per share. On an adjusted basis, earnings per share were $0.15, which was about in-line with estimate.

Now what: The challenge in early trading is that revenue was short of estimates, and someone obviously took the opportunity to sell a block of shares. But the stock recovered to about a 2.3% loss late in trading, because the earnings report wasn't a complete disaster. Shares now trade at 22 times next year's earnings estimates, a steep price for a company with flat earnings, so unless the stock dips, I think I'll stay away from this investment for today.

Interested in more info on InnerWorkings? Add it to your watchlist by clicking here.

The article Why InnerWorkings' Shares Dropped originally appeared on Fool.com.

Fool contributor Travis Hoium has no position in any stocks 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 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.