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 business relationship management expert Convergys (NYSE: CVG ) found a soul mate in Mr. Market today as the stock jumped 13.8% in intraday trading amid fairly heavy volume.
So what: The just-reported third quarter saw 47% stronger non-GAAP earnings compared to the year-ago period, beating analyst estimates and backed up by strong sales in both IT and customer management solutions. Mind you, the stock also gained as much as 16% on the second-quarter report, only to lose 30% in a matter of days right behind that pop.
Now what: On days like this, Convergys may look like a solid performer, but the long-term picture tells a different story. This is a perennial 1-star or 2-star stock in our 5-star CAPS system, backed up by one-year and five-year charts where Convergys always lags behind direct rivals TeleTech (Nasdaq: TTEC ) and Accenture (NYSE: ACN ) , as well as on-and-off competitor IBM (NYSE: IBM ) . All of these Convergys alternatives also carry more respectable CAPS ratings. In short, a couple of good-looking quarters don't erase years of slow growth and thin margins.
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