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 infection prevention and control products company Cantel Medical (NYSE: CMN ) deflated by as much as 13%, following the release of its fourth-quarter results.
So what: For the quarter, Cantel Medical reported a 15% increase in revenue to $98.7 million, as net income more than doubled to $9.6 million, or $0.35 per share. The EPS figure easily surpassed expectations of $0.32; however, sales fell well short of the $102.7 million that analysts had been looking for. The key point worth noting, aside from the revenue miss, was that gross margins rose by a whopping 600 basis points to 43.3%, as synergies from acquisitions began to really kick in.
Now what: After doubling over the trailing 12-month period, today's move lower may be deserved, or perhaps it's a little unfair, given Cantel's record results. I would personally like to see if Cantel can grow its business organically over the coming quarters, and I'd also prefer to see that forward P/E of 18 fall a bit. In the meantime, I'll keep an eye on the stock from the sidelines by adding it to My Watchlist.
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