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Why A. Schulman's Shares Popped

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 chemical maker A. Schulman (Nasdaq: SHLM  ) jumped 10% today after the company released earnings.

So what: Third-quarter adjusted earnings per share were $0.69 versus the $0.62 analysts had expected. However, sales fell 7% to $569.1 million during the quarter.

For the full year, the company now expects adjusted earnings per share of $2.03 to $2.07, higher than the current $2.01 estimate.

Now what: Earlier this year, investors were spooked by a $0.01 miss, and this quarter just balances things out. The higher estimate for the year is encouraging, but we should keep in mind that it still doesn't reach the $2.16 in earnings per share analysts had expected three months ago. Today's news is a positive short term, but I'm leery of the fall in sales and I would prefer to buy if the stock falls back to where it was before the pop to get more value out of the investment.

Interested in more info on A. Schulman? 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.

Try any of our Foolish newsletter services free for 30 days. We Fools may not 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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Travis Hoium

Travis Hoium has been writing for since July 2010 and covers the solar industry, renewable energy, and gaming stocks among other things.

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Related Tickers

5/23/2016 4:00 PM
SHLM $24.80 Down -0.09 -0.36%
A. Schulman, Inc. CAPS Rating: *****