Why CoreLogic 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 financial analytics and business services company CoreLogic (NYS: CLGX) rallied as much as 17% earlier in the trading session after it reported better-than-expected second-quarter results.
So what: For the quarter, CoreLogic reported a 19% rise in revenue to $389.4 million as profits increased to $0.40 from $0.29 in the year-ago period. Both figures easily surpassed Wall Street's expectation for a profit of $0.37 on $374.1 million in sales. CoreLogic noted double-digit revenue growth across all of its business segments, but can also attribute a large portion of its EPS gains to stringent cost-cutting measures. CoreLogic plans to cut $60 million out of its expenses through outsourcing and reduced real estate spending this year, and an additional $20 million in 2013.
Now what: There's never anything wrong with a company that can grow while it's also tightening its belt. However, at nearly 19 times forward earnings, I'm not exactly sure that I'd be so excited to chase CoreLogic higher. Eventually, those expense reductions are going to cut into its earning potential and growth prospects will taper, so for now I'd just as soon add it to my watchlist.
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The article Why CoreLogic Shares Popped originally appeared on Fool.com.Fool contributor Sean Williams has no material interest in any companies mentioned in this article. You can follow him on CAPS under the screen name TMFUltraLong, track every pick he makes under the screen name TrackUltraLong, and check him out on Twitter, where he goes by the handle @TMFUltraLong.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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