Why Texas Industries' Shares Cemented Big Gains

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 heavy construction products supplier Texas Industries (NYSE: TXI  ) cemented big gains of as much as 12% following an upgrade from research firm Sidoti.

So what: In a report released earlier today, Sidoti upgraded Texas Industries to "buy" from "neutral." The upgrade follows TXI's first-quarter earnings release from three weeks ago that saw the company miss Wall Street's earnings estimates by reporting a wider-than-expected loss, despite noting that shipments are improving, pricing is stabilizing, and margins are showing signs of correcting in the right direction.

Now what: As usual, it's rarely worth paying much credence to the one-day pops and drops that are caused by analyst upgrades and downgrades as they don't often play into the long-term scheme of an investment. On a secondary note, I've never even heard of Sidoti despite my 14 years of investing, so I'm even less inclined to chase this one-day rally higher. Until TXI can cement its shareholders a bottom line profit, I'd just assume leave it on the sidelines.

Craving more input? Start by adding Texas Industries to your free and personalized Watchlist so you can keep up on the latest news with the company.

Fool contributor Sean Williams has no material interest in any companies mentioned in this article. You can follow him on CAPS under the screen name TMFUltraLong, track every pick he makes under the screen name TrackUltraLong, and check him out on Twitter, where he goes by the handle @TMFUltraLong.

Try any of our Foolish newsletter services free for 30 days. We Fools don't 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.


Read/Post Comments (0) | Recommend This Article (1)

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

Be the first one to comment on this article.

Sponsored Links

Leaked: Apple's Next Smart Device
(Warning, it may shock you)
The secret is out... experts are predicting 458 million of these types of devices will be sold per year. 1 hyper-growth company stands to rake in maximum profit - and it's NOT Apple. Show me Apple's new smart gizmo!

DocumentId: 2060252, ~/Articles/ArticleHandler.aspx, 10/2/2014 4:31:32 AM

Report This Comment

Use this area to report a comment that you believe is in violation of the community guidelines. Our team will review the entry and take any appropriate action.

Sending report...


Advertisement