John Bean Technologies Dropped: What You Need to Know (JBT)

John Bean Technologies Dropped: What You Need to Know

Watch stocks you care about

The single, easiest way to keep track of all the stocks that matter...

Your own personalized stock watchlist!

It's a 100% FREE Motley Fool service...

Click Here Now

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: On Wednesday, John Bean Technologies (NYSE: JBT ) dropped as much as 10% before clawing its way back to end the day at only a 2.6% loss.

So what: Thank heavens for small blessings, but what sparked the sell-off in the first place? Excellent question. JB announced earnings after the close of trading Tuesday. Revenues were up 21%. Operating income, likewise. Backlog, however, rose only 3%, and "inbound orders," while not quite so weak, rose only 17%.

Now what: That 17% is slower than the 21% by which sales rose in Q2. ("Look, Mom! No calculator!") This suggests that JB's due for less spectacular growth going forward. In light of this, JB tweaked its earnings guidance for the rest of this year, predicting that it will end 2011 with about $1.40 in profit per diluted share.

And that's the problem in a nutshell. Based on this earnings guidance, JB shares are selling for about 11.5 times this year's earnings. Analysts don't think the company can manage much more than 1% annual earnings growth over the next five years, which gives the stock a pretty sizeable PEG ratio. Add in the fact that JB is currently burning cash -- and has been for more than a year -- and I can see why some shareholders today might choose Jim Bean over John Bean.

Want to learn more about John Bean Technologies? Add the stock to your Fool Watchlist.

The Steve Jobs Betrayal
You may already know that in the final year of his life, Jobs revealed a stunning betrayal — and told his biographer, "I will spend my last dying breath... and every penny of Apple's $40 billion in the bank to right this wrong." What was it that made Jobs so irate — and why could it make a few in-the-know investors some major profits over the coming months and years?

Enter your email address below to find out what made Jobs so enraged!

Fool contributor Rich Smith does not own (or short) shares of John Bean Technologies. 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 has a disclosure policy.

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 icon found on every comment.