Why Granite Construction's Shares Dropped
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 construction company Granite Construction (NYS: GVA) fell more than 10% today after the company released a disappointing earnings report.
So what: Revenue rose 21% from a year ago to $310 million and net loss was $12 million, or $0.31 per share. The loss was $0.08 more than analysts had expected, and the market obviously reacted negatively as a result.
Now what: To be fair, this is a slow time of the year for Granite, and a loss was expected. The company also crushed earnings estimates the past two quarters, so investors may have gotten a little ahead of themselves. Volume is still up, the company is growing, and with shares trading at 12 times forward earnings, I wouldn't be selling this sell-off today.
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At the time this article was published Fool contributor Travis Hoium has no 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 don't 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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