Why A.M. Castle's Shares Plunged Today

Why A.M. Castle's Shares Plunged 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: Metals and plastics distributor A.M. Castle dropped 10% today after predicting a third-quarter loss.

So what: Revenue is expected to be between $250 million and $255 million for the quarter, well below the $278.3 million analysts expected. On the bottom line, analysts were expecting a $0.07 per share loss, but the company will lose between $0.28 and $0.32 per share.

Now what: Full results are due out on Tuesday, October 29, but companies that are going to miss by a wide margin often warn investors ahead of time. Considering the weakness this quarter, and a loss that will presumably be higher than the $0.46 per share analysts are now expecting I think there's an uphill climb for the company. Investors were expecting strong revenue growth next year to reach profitability, and I don't see that happening; so until operations turn around, I see this stock as too high risk to touch.

More great stocks
Interested in natural resources? Then you owe it to yourself to discover the most precious resource in the history of the world. It's not gold. Or even oil. But it's more valuable than both of them. Combined. And here's the crazy part: one emerging company already has the market cornered... and stands to make in-the-know investors boatloads of cash. We reveal all in our special 100% FREE report The 21st Century's Most Precious Natural Resource. Just click here for instant access!

Interested in more info on A.M. Castle? Add it to your watchlist by clicking here.

The article Why A.M. Castle's Shares Plunged 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.

Originally published