Why Corporate Resource Services 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 staff services company Corporate Resource Services jumped as much as 20% in early trading after announcing guidance. Shares fell in late trading but are still up 7% on the day.

So what: Management said that earnings to be released on Nov. 13 will show a 17% increase in revenue from a year ago and a 50% sequential jump in EBITDA margins. This past month was the most profitable in the company's history and bottom-line margins are expected to be abnormally high.

Now what: This was positive guidance, but we'll have to wait a month and a half to get the final numbers. Also consider that higher net margins don't mean much when you're barely profitable to begin with. I'd like to see longer-running strong margins than just one quarter before buying in, so see what guidance for next quarter looks like in November.

Interested in more info on Corporate Resource Services? Add it to your watchlist by clicking here.

The article Why Corporate Resource Services Shares Popped 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.