June 5, 2012
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 gaming device specialist Shuffle Master (Nasdaq: SHFL ) plunged 14% on Tuesday after its quarterly results disappointed Wall Street.
So what: Shuffle Master's second-quarter results were actually in line with estimates -- EPS of $0.20 on revenue of $66.1 million versus the consensus of $0.20 and $65.1 million -- but given the stock's run-up over the past six months, it's clear that investors were expecting more. Of course, gross and operating margins increased while management delivered record quarterly revenue growth, so expectations aside, the company seems to have some decent tailwinds working in its favor.
Now what: I'd look into this pullback as a possible buy-in opportunity. "We are confident that our continued strong momentum across our core businesses and the rollout of our interactive initiatives are key drivers of our future earnings potential and will write the next chapter of our profitable growth story," CEO Gavin Isaacs said. More important, with the stock down about 35% from its 52-week highs and trading at a forward P/E of 13, that growth might be available on the cheap.
Interested in more info on Shuffle Master? Add it to your watchlist.
More Expert Advice from The Motley Fool
The Motley Fool's chief investment officer has selected his No. 1 stock for the next year. Find out which stock in our brand-new free report: "The Motley Fool's Top Stock for 2013
." I invite you to take a copy, free for a limited time. Just click here
to access the report and find out the name of this under-the-radar company.