Why Datalink Corporation Shares Skyrocketed
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 Datalink Corporation jumped more than 31% Wednesday after the company increased its fourth-quarter revenue and earnings guidance.
So what: Fourth-quarter revenue is now expected to be $174 million, compared to the company's own guidance for sales between $160 million and $170 million. That should translate to adjusted earnings per share in the range of $0.33 to $0.37. By comparison, analysts were modeling earnings of just $0.25 per share on sales of $164.86 million.
Now what: Datalink isn't scheduled to officially release fourth-quarter earnings until February 20, but the timing of today's revision is notable considering management is set to present at tomorrow's 16th annual Needham Growth Conference. Investors can look forward to hearing more about exactly how Datalink is exceeding expectations then.
In the meantime, though shares are currently trading for around 32 times trailing earnings, they look much more attractive at 16 times next year's yet-to-be-increased estimates. As a result, and despite today's big jump, I think Datalink investors would be wise to think twice before taking all their chips off the table.
Consider our CIO's top stock for 2014
Of course, I wouldn't argue if you insist on taking some profits today. But if that's the case, where should you put your money to work?
Well, there's a huge difference between a good stock, and a stock that can make you rich. Lucky for you, The Motley Fool's chief investment officer has selected his No. 1 stock for 2014, and it's one of those stocks that could make you rich. You can find out which stock it is in the special free report: "The Motley Fool's Top Stock for 2014." Just click here to access the report and find out the name of this under-the-radar company.
The article Why Datalink Corporation Shares Skyrocketed originally appeared on Fool.com.Fool contributor Steve Symington 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 - 2014 The Motley Fool, LLC. All rights reserved. The Motley Fool has a disclosure policy.