Electronics for Imaging Shares Popped: What You Need to Know

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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: Shares of Electronics for Imaging (Nasdaq: EFII  ) , a provider of various printing solutions, are heading higher by the tune of 11% today after the company announced its preliminary fourth-quarter results.

So what: The only thing being printed today is money for optimists following Electronics for Imaging's bullish outlook. The company expects to report a profit of $0.37-$0.38 on sales of approximately $163 million, which compares favorably to Wall Street's consensus of a profit of $0.32 and sales of $158 million. As if the upcoming earnings beat wasn't enough, the company also announced it was acquiring privately held Cretaprint for $31 million and expects the transaction to be accretive to earnings beginning in 2012.

Now what: Today's move looks like a step in the right direction for Electronics for Imaging, but I'm still not sold. Historically, the company's profits and sales tend to ebb and flow with the economy (i.e. it's cyclical), and therefore it doesn't make a great candidate to buy and hold. However, if you are looking for a potential trading idea for 2012, Electronics for Imaging definitely has a good amount of momentum heading into the year. It's trading at a lower price-to-cash-flow multiple than it has in a decade and has a shot to head even higher over the short term.

Craving more input? Start by adding Electronics for Imaging to your free and personalized watchlist so you can keep up with the latest news on the company.

Fool contributor Sean Williams has no material interest in any companies mentioned in this article. You can follow him on CAPS under the screen name TMFUltraLong, track every pick he makes under the screen name TrackUltraLong, and check him out on Twitter, where he goes by the handle @TMFUltraLong. Try any of our Foolish newsletter services free for 30 days. We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

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Related Tickers

10/28/2016 4:00 PM
EFII $42.42 Down -0.49 -1.14%
Electronics For Im… CAPS Rating: ****