Why Affymetrix Shares Popped

Why Affymetrix 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 genetic testing instrument maker Affymetrix, Inc. climbed 14% today after its quarterly results topped Wall Street expectations.

So what: The stock was crushed last month on concerns over rapidly slowing growth, but today's second-quarter results -- adjusted EPS of $0.04 on a revenue jump of 20% -- are quickly putting those worries to rest. The top line was fueled largely by its acquisition of eBioscience last year, along with healthy demand in North America and Europe, giving analysts plenty of good vibes over the company's turnaround prospects going forward.

Affymetrix's financial picture is certainly trending in the right direction.

"Since June of last year we have reduced our senior-secured debt by nearly 25%," said CFO GavinWood. "We exited the quarter with $44 million in cash-on-hand."

So while Affymetrix's consistent losses and still-heavy debt load continue to make the stock a rather speculative pick, its fundamentals seem to be improving enough to put it on your watchlist.

The best investing approach is to choose great companies and stick with them for the long term. The Motley Fool's free report "3 Stocks That Will Help You Retire Rich" names stocks that could help you build long-term wealth and retire well, along with some winning wealth-building strategies that every investor should be aware of. Click here now to keep reading.

The article Why Affymetrix 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.