Walter Energy Shares 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: It seems like everything is down today, but Walter Energy (NYSE: WLT  ) is down more than most -- 25% and counting. Yowza.

So what: Second-quarter "adjusted" earnings came in at $2.36 per share last night -- well over 40% short of the estimated $3.98-per-share profit. To top it all off, Wall Street investment bankers Brean Murray and KeyBanc both downgraded Walter to "hold" this morning. Ouch.

Now what: Personally, I think the panic's a bit overdone. Maybe Walter missed estimates, but so what? It still generated enough cash profit that, post-sell-off, its price-to-free cash flow ratio is sitting just under 16. This for a company that's put together five years of average 15% annual growth, and which many analysts believe will keep growing in the double digits for the next five years. If Wall Street is selling this one, I want to be on the other side of the trade.

Want to learn more about Walter Energy? Add it to your Fool Watchlist.

Fool contributor Rich Smith does not own (or short) shares of Walter Energy. 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 (1) | Recommend This Article (0)

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.

Add your comment.

Compare Brokers

Fool Disclosure

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: 1533482, ~/Articles/ArticleHandler.aspx, 10/27/2016 8:53:01 PM

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...

Today's Market

updated Moments ago Sponsored by:
DOW 18,169.68 -29.65 -0.16%
S&P 500 2,133.04 -6.39 -0.30%
NASD 5,215.97 -34.29 -0.65%

Create My Watchlist

Go to My Watchlist

You don't seem to be following any stocks yet!

Better investing starts with a watchlist. Now you can create a personalized watchlist and get immediate access to the personalized information you need to make successful investing decisions.

Data delayed up to 5 minutes

Related Tickers

10/27/2016 3:46 PM
WLTGQ $0.06 Up +0.00 +7.22%
Walter Industries,… CAPS Rating: **