By
Rich Smith (TMF Ditty)
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More Articles
August 3, 2011
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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: One day after World Fuel Services (NYSE: INT ) reported a 35% increase in Q2 profit, its stock reacted -- up 11% in Wednesday trading.
So what: That's a pretty big number on the earnings side, but it pales in comparison with WFS's top-line performance, where revenues nearly doubled to $8.7 billion at the fuel logistics company.
Now what: Sound good? Not so fast -- it wasn't uniformly great news. If WFS's GAAP numbers are going vertical, we're seeing a different trajectory entirely on the cash-flow statement. Free cash flow in Q2 was nearly cut in half from last year's Q2 number. So far this year, the company has managed to burn through about $145 million in cash -- quite a turnaround from the near-$20 million it generated in last year's first half.
Long story short, even at 17 times earnings, this stock is no bargain.
Want to learn more about World Fuel Services? Add it to your Fool Watchlist.
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