Hanger Orthopedic Group 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: Hang on -- shares of Hanger Orthopedic Group (NYSE: HGR  ) fell as much as 10.7% overnight before making a modest recovery, with a huge volume spike at the bottom of the bounce.

So what: The orthopedic device wrangler and operator of orthotic and prosthetic care centers across America matched or beat revenue and earnings estimates in last night's first-quarter report and reaffirmed its existing full-year guidance. None of this was surprising in the least, but then investor expectations on this type of high-octane growth stocks often get a bit ahead of themselves.

Now what: Overheated expectations often set the stage for heartbreak, and that's what we have here: That volume spike sticking out like a sore thumb looks a lot like one large investor dumping a large batch of shares in disgust. Sporting five CAPS stars out of five, Hanger is one of the highest-rated stocks in the red-hot health-care provider field, beating such stalwarts as Quest Diagnostics (NYSE: DGX  ) and WellPoint (NYSE: WLP  ) . A drop like this on a high-quality stock can be a signal to buy shares at a discount.

Interested in more info on Hanger Orthopedic Group? Add it to your watchlist.

Fool contributor Anders Bylund holds no position in any of the companies discussed here. Motley Fool newsletter services have recommended buying shares of WellPoint and Quest Diagnostics. 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 is investors writing for investors.


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