Why XPO Logistics 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 XPO Logistics jumped 13% today after announcing an acquisition.
So what: The company will pay $365 million for logistics provider 3PD, consisting of $357 million in cash an $8 million in XPO restricted stock. Is will use its own cash and borrow $195 million from Credit Suisse Group for the remainder of the purchase.
Now what: Management said that the deal will "immediately and significantly" add to profits, which is good because XPO has had trouble making money lately. Over the past year it has reported $1.97 per share in losses, and analysts aren't expecting the company to be profitable until at least next year. This may push those expectations for profit forward, and that's why investors are cheering the move today.
Interested in more info on XPO Logistics? Add it to your watchlist by clicking here.
The article Why XPO Logistics Shares Popped originally appeared on Fool.com.Fool contributor Travis Hoium 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 - 2013 The Motley Fool, LLC. All rights reserved. The Motley Fool has a disclosure policy.