Synutra Shares Popped: What You Need to Know (ADY, SYUT)

Synutra Shares Popped: What You Need to Know

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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 Synutra International (Nasdaq: SYUT ) , which sells infant formula primarily in China, popped by 17% on Friday, further extending its impressive month-long rally.

So what: Even with the shortened trading session, the Synutra surge comes on roughly double the stock's three-month average trading volume. Despite posting a much wider-than-expected second-quarter loss just a few weeks ago, the shares have managed to climb by about 30% in November.

Now what: It's tough to explain exactly what's driving Synutra's month-long surge, let alone today's 15%-plus climb. After all, weakening sales also prompted management to cut its profit guidance for next year by $0.30. With rival American Dairy (NYSE: ADY ) trading at a much lower forward P/E, Synutra doesn't seem like the healthiest bet in the space.

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Fool contributor Brian Pacampara owns no position in any of the companies mentioned. Try any of our Foolish newsletter services free for 30 days.

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