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 DG FastChannel (Nasdaq: DGIT  ) fell as much as 27% and remain down more than 25% as of this writing, after the company missed second-quarter revenue estimates.

So what: The digital ad distributor said revenue came in almost $6 million short of Wall Street's consensus projection -- $67.9 million versus the $73.6 million analysts had been calling for, Reuters reported. GAAP profits improved 16% to $0.37 a share while non-GAAP earnings of $0.55 beat expectations by three pennies.

Now what: Like many Fools, I'm long DG FastChannel in Motley Fool CAPS, where the stock merits five out of five stars. There's no justification for this much selling when the company beat profit estimates by $0.03. As it now stands, the stock trades for roughly half the long-term earnings growth analysts expect -- a bargain by my math. Do you agree? Would you buy at these levels? Weigh in using the comments box below.

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. He didn't own shares in any of the companies mentioned in this article at the time of publication. Check out Tim's portfolio holdings and Foolish writings, or connect with him on Google+ or Twitter, where he goes by @milehighfool. You can also get his insights delivered directly to your RSS reader.

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Read/Post Comments (3) | 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.

  • Report this Comment On August 08, 2011, at 4:18 PM, chadscards1274 wrote:

    Thank you for pointing out the craziness of the current market. This is just one example of a good company that beats earnings estimates and gets crushed. I'm long DGIT and expect when the market regains it's senses the stock will recover nicely.

  • Report this Comment On August 08, 2011, at 4:42 PM, jlnowling wrote:

    Tim, I also started to add more shares today. How can this stock drop like this, 32ish to 18 ? DGIT MUST BE HAPPY BEING IN THE BUY BACK MODE? Low peg, I'm I missing something? I'm long. Jeff

  • Report this Comment On August 10, 2011, at 9:19 AM, kskrismf wrote:

    I have been following this company for almost ten years and have bought and sold multiple times all of them for a profit and I started buying in 20's and added more at 17.59 bringing my average to low 20's.

    This will go up and as usual with my dgit trades, I shall close this position in profit too, it's a matter of time.

    I am Long and bullish on this one.

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