Why Ferro's Shares Jumped

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 specialty chemicals maker Ferro jumped 16% today after the company reported earnings.

So what: Sales were essentially flat from a year ago at $408.1 million, but net income improved drastically from a $316.1 million loss to a $12.7 million profit in the third quarter. Adjusted for one-time items that was earnings per share of $0.14, four cents better than estimates.  

Now what: Management has been trying to cut costs to improve profitability and by 2014 expects annual cost savings to be $70 million. Those cost savings are already helping the bottom line, and management expects full-year earnings to be between $0.42 and $0.45 per share. At best, that puts shares at 26 time this year's earnings, which is still too expensive for me even after the bottom-line beat. I'd just like to see more growth before jumping into the stock.

Interested in more info on Ferro? Add it to your watchlist by clicking here.

The article Why Ferro's Shares Jumped 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.

Read Full Story