DG FastChannel Shares Plunged: 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: Shares of digital-ad-delivery specialist DG FastChannel (Nasdaq: DGIT  ) fell by as much as 12% in intraday trading for reasons passing understanding.

So what: Seriously, I don't know what to make of the sell-off. Revenue rose by 19% to $64.7 million, while diluted earnings improved 41% to $0.45 a share during the first quarter. Analysts were expecting $63.8 million and $0.41, respectively, according to Yahoo! Finance data.

Now what: Perhaps the recent sell-off in ad-delivery peer Akamai Technologies (Nasdaq: AKAM  ) has tarnished DG's sheen? Or maybe the prospect of borrowing under a new $150 million credit agreement spooked investors? A planned $50 million stock-repurchase program shouldn't be the issue. Either way, if today's sell-off holds, the stock will end the day priced for less than the long-term earnings growth analysts expect, resulting in a PEG ratio of 0.84. That's enough of a potential discount for me to take a flyer on the stock in my CAPS portfolio.

Interested in more info on DG FastChannel? Add it to your watchlist.

Fool contributor Tim Beyers is a member of the Motley Fool Rule Breakers stock-picking team. Akamai is a Rule Breakers recommendation. You can try any of our Foolish newsletter services free for 30 days.

Tim owned shares of Akamai at the time of publication. Check out his portfolio holdings and Foolish writings, or connect with him on Twitter as @milehighfool. You can also get his insights delivered directly to your RSS reader. We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool is also on Twitter as @TheMotleyFool. Its disclosure policy is at least 10% better than other disclosure policies.


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