Why Middleby's 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 food equipment maker Middleby (Nasdaq: MIDD  ) rose as much as 19.5% today after the company released second-quarter earnings.

So what: Sales rose 23.3% to $260.0 million in the second quarter and the company had net income of $31.0 million, or $1.67 per share. Analysts only expected $1.41 in earnings, marking at least four straight quarters the company has topped estimates.

Now what: The company's food processing group led the way with a 94.8% increase in revenue due to a number of acquisitions. These acquisitions drove most of the company's growth, which shouldn't be forgotten because growth would have been just 4.9% without the new additions. With shares trading at 19.5 times 2012 earnings estimates they're a little too expensive for me to jump into today, despite another earnings beat.  

Interested in more info on Middleby? 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.

Motley Fool newsletter services have recommended shorting Middleby. The Motley Fool has a disclosure policy. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. Try any of our Foolish newsletter services free for 30 days.

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10/25/2016 4:00 PM
MIDD $109.23 Down -7.16 -6.15%
Middleby CAPS Rating: *****