Why Fortune Brands' Shares Jumped Today

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 Fortune Brands Home & Security jumped as much as 11% in early trading after the company released earnings.

So what: First quarter sales rose 11%, to $890 million, and adjusted earnings per share tripled to $0.24. Analysts only expected $862.5 million in revenue, and $0.16 in earnings per share. To top it off, management raised its full year earnings outlook to $1.23 to $1.33 per share, at the top end of estimates.

Now what: Fortune will also acquire WoodCrafters Home Products, a maker of bathroom vanities. The numbers today were great, but the stock's value is what I'm worried about right now. Shares are trading for at least 30 times 3013 estimates, which is a steep price for Fortune, even with double-digit growth.

Interested in more info on Fortune Brands Home & Security? Add it to your watchlist by clicking here.

The article Why Fortune Brands' Shares Jumped Today originally appeared on Fool.com.

Fool contributor Travis Hoium 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.

Read Full Story

Can't get enough business news?

Sign up for Finance Report by AOL and get everything from retailer news to the latest IPOs delivered directly to your inbox daily!

Subscribe to our other newsletters

Emails may offer personalized content or ads. Learn more. You may unsubscribe any time.