Why Resources Connection 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 Resources Connection jumped as much as 12% today after the business consulting company released fiscal second-quarter earnings.

So what: Revenue was up 10.9% sequentially and 3.4% year over year to $146 million. Net income was up 20.1% to $7.1 million, or $0.18 per share, beating analysts' estimate of $0.15.

Now what: Management said customers are willing to look into doing more large-scale projects, which opens up opportunities in the future. But before we get too excited about the improvement, keep in mind that the company missed earnings by $0.03 last quarter, so not all results were positive. Shares trade at 28 times this year's earnings estimates, so the low growth rate year over year and a high multiple will keep me out of the stock right now.

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The article Why Resources Connection 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.

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