Why Shares of Omega Protein Corporation Jumped

Before you go, we thought you'd like these...
Before you go close icon

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 Omega Protein Corporation  were looking stronger today, gaining as much as 21% after reporting fourth-quarter earnings this morning.

So what: The maker of Omega-3 fish oils and specialty protein products said revenues increased 4% to $66 million, missing expectations at $69.5 million, though earnings per share soared from $0.20 a year ago to $0.66, cruising past estimates at $0.32. The surge in profits came as gross margin jumped from 20.5% to 42.4% due to "an increase in fish oil and fish meal sales prices and greater-than-anticipated fish catch in the fourth quarter," which lowered costs and boosted margins in the animal nutrition segment to 47.1% .  


Now what: The jump in animal nutrition gross margins was offset by a drop in the human nutrition segment from 24.9% to 13.6%, showing the volatility of Omega's business. Still, animal nutrition makes up over 80% of Omega's revenue so the price increases seem to bode well going forward. Omega did not release guidance, but the company has beaten earnings estimates easily in its past four quarters, and looks cheap based on its trailing valuation at a P/E under 8. Look for analysts to lift their estimates, which should give the stock another boost. 

Love to beat the pros?
Omega may be a steal after today's report, but there's one sure way to get wealthy in the stock market: Invest in a groundbreaking company that goes on to dominate a multibillion-dollar industry. Our analysts have done it before with the likes of Amazon and Netflix. And now they think they've done it again with three stock picks that they believe could generate the same type of phenomenal returns. They've revealed these picks in a new free report that you can download instantly by clicking here now.

The article Why Shares of Omega Protein Corporation Jumped originally appeared on Fool.com.

Jeremy Bowman has no position in any stocks mentioned. The Motley Fool owns shares of Omega Protein. 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.

Read Full Story

Want more news like this?

Sign up for Finance Report by AOL and get everything from business news to personal finance tips delivered directly to your inbox daily!

Subscribe to our other newsletters

Emails may offer personalized content or ads. Learn more. You may unsubscribe any time.

From Our Partners