Why Power Integrations' Shares Jumped

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 Power Integrations (Nasdaq: POWI  ) jumped as much as 20% today after the company released first-quarter earnings.

So what: Revenue grew 8% sequentially to $71.8 million. Net income was $7.5 million, or $0.36 per share. Analysts had only expected revenue of $67.3 million and earnings per share of $0.27.

Now what: Industrial and consumer applications drove the growth in the first quarter, but high-voltage applications could drive future growth. The company just completed its acquisition of CT-Concept, giving the company exposure to high-voltage power conversion applications, including the fast-growing renewable-energy industry. Growth is impressive, but I'm cautious about today's bounce because the market has a lot of growth already priced in, with shares trading at 20 times forward earnings estimates.

Interested in more info on Power Integrations? Add it to your watchlist by clicking here.

Fool contributor Travis Hoium does not have a position in any company mentioned. You can follow Travis on Twitter at @FlushDrawFool, check out his personal stock holdings, or follow his CAPS picks at TMFFlushDraw.

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