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 microelectronics components maker Aeroflex
So what: Aeroflex crashed hard on Thursday after offering disappointing next-quarter guidance on a generally terrible market day. Today, investors took a more sober view of the situation and started buying Aeroflex on the dip -- including one very large trading block after lunch that represents about one-third of the stock's average daily volume in a matter of minutes.
Now what: The company's largest customers are major defense contractors such as Lockheed Martin
Moreover, a short history on the public markets meets trailing P/E ratios of more than 200 but a forward P/E below 7. I don't blame investors for scratching their heads over this stock's true value.
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