Wabash National Dropped: What You Need to Know

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: You might think investors would be happy to hear Wabash National (NYSE: WNC  ) announce earnings of $0.05 per share yesterday, instead of the $4.64 per share it lost last year. You might think they'd be especially pleased by the earnings number considering analysts had told them to expect only $0.02 per share in profits. And that they'd be thrilled to learn from CEO Dick Giromini that Wabash just booked its biggest first-quarter gross profit margin since 2007. You might think all that … but you'd be wrong.

Instead of cheering and tickertape, investors met Wabash's news with a wave of catcalls, and a 10% drop in share price.

So what: Maybe investors were just too optimistic, and assumed Wabash would beat bigger than it actually did. After all, aside from a few outliers like YRC Worldwide (Nasdaq: YRCW  ) , we've seen generally strong results from truckers Old Dominion Freight (Nasdaq: ODFL  ) , JB Hunt (Nasdaq: JBHT  ) , and UPS (NYSE: UPS  ) these past few weeks. And Wabash does build trailers for trucking fleets. Success this past quarter may have been a conclusion foregone -- and optimism, overblown.

Now what: Now that reality has set in, what we're left with at Wabash is a company that's barely breaking even on a GAAP basis, and still burning cash like a trucker burns diesel. Until it gets its cashflow fixed, I wouldn't recommend hitching a ride.

Want more information on Wabash National? Add it to your watchlist.

The Fool owns shares of UPS, but Fool contributor Rich Smith does not own shares of, nor is he short, any company named above.  The Motley Fool has a disclosure policy. Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors.


Read/Post Comments (0) | Recommend This Article (1)

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

Be the first one to comment on this article.

Sponsored Links

Leaked: Apple's Next Smart Device
(Warning, it may shock you)
The secret is out... experts are predicting 458 million of these types of devices will be sold per year. 1 hyper-growth company stands to rake in maximum profit - and it's NOT Apple. Show me Apple's new smart gizmo!

DocumentId: 1488395, ~/Articles/ArticleHandler.aspx, 9/22/2014 10:31:51 AM

Report This Comment

Use this area to report a comment that you believe is in violation of the community guidelines. Our team will review the entry and take any appropriate action.

Sending report...

Apple's next smart device (warning, it may shock you

Apple recently recruited a secret-development "dream team" to guarantee its newest smart device was kept hidden from the public for as long as possible. But the secret is out. In fact, ABI Research predicts 485 million of this type of device will be sold per year. But one small company makes Apple's gadget possible. And its stock price has nearly unlimited room to run for early-in-the-know investors. To be one of them, and see Apple's newest smart gizmo, just click here!


Advertisement