Why UTi Worldwide'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 supply chain company UTi Worldwide (Nasdaq: UTIW  ) rose 11% today after the company released fiscal-second-quarter 2013 earnings.

So what: Revenue fell 10.9% to $1.16 billion and net income fell to $18.9 million, or $0.20 per share after adjusting for one-time items. Both results were well below expectations, which were for $1.28 billion in revenue and $0.23 in earnings per share. So why is the stock up?

Investors were expecting even worse after FedEx (NYSE: FDX  ) warned that its profit would be lower than expected for the current quarter.

Now what: The results today weren't good but according to analysts they do show signs of stabilizing, which is all investors needed to push shares higher today. I'm still not buying the jump given the fact that shares trade at 18 times trailing earnings and revenue and net income are headed in the wrong direction. If the economy picks up, then supply chain companies may benefit, but I only see this as an incremental positive in the near future, not enough to drive results significantly higher.

Interested in more info on UTi Worldwide? 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 buying shares of FedEx. 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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