Why Lennox International's Shares Jumped
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 HVAC designer and manufacturer Lennox International (NYS: LII) jumped 13% today after first-quarter results came in better than expected.
So what: Revenue rose 2.2% from last year, to $684 million, slightly below expectations. What really surprised investors was the company's $0.01-per-share profit, $0.11 better than expectations.
Now what: Management's comments indicate that demand is growing at a slow pace, something investors shouldn't be too disappointed in considering the state of the housing market. A warm winter didn't slow demand in the residential market and if that translates into a warm summer, results could be better than expected again. Shares are trading at 13.6 times forward earnings estimates and if new construction and commercial revenue pick up, this stock looks like a good value here, especially with a nice 1.9% dividend yield.
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At the time this article was published Fool contributor Travis Hoium does not have a position in any company mentioned. You can follow Travis on Twitter at @FlushDrawFool, check out his personal stock holdings or follow his CAPS picks at TMFFlushDraw.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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