Liquidity Services Shares Surged: What You Need to Know


What: Shares of online auctioneer Liquidity Services (NAS: LQDT) soared 25% in intraday trading Thursday after announcing plans to buy Jacobs Trading's consumer goods remarketing business.

So what: The move should allow Liquidity Services to add significantly to its consumer business, as well as expand its relationship with retail behemoth Wal-Mart (NYS: WMT) . Given the stock's huge jump, investors wholeheartedly agree with the strategy and the $140 million purchase price ($80 million in cash, $20 million in stock, $40 million in a seller promissory note).

Now what: Don't let today's pop keep you from following the stock. Jacobs Trading has grown its top-line at a consistent 20%-plus clip over the past several years and is expected to add per-share earnings of $0.28-$0.33 to Liquidity's 2012 results. With its PEG ratio still sitting at a reasonable 1.0, Liquidity Services is certainly worth looking into.

Interested in more info onLiquidity Services?Add it to your watchlist.

At the time thisarticle was published We Fools may not all hold the same opinions, but we all believe thatconsidering a diverse range of insightsmakes us better investors.The Fool'sdisclosure policyalways gets a perfect score.

Copyright © 1995 - 2011 The Motley Fool, LLC. All rights reserved. The Motley Fool has a disclosure policy.