November 14, 2012
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 Stamps.com (Nasdaq: STMP ) got left behind today, falling as much as 15% today after research group Craig-Hallum said the mailing specialist's website had experienced a number of IT outages this month.
So what: Notably, Craig-Hallum reiterated its buy rating on Stamps.com, so the comment wasn't intended to send shareholders running. The postage service is coming off a strong third quarter during which PC-postage revenue grew 20%, and it saw adjusted EPS grow to $0.50 from $0.38 a year ago.
Now what: Shares shot up 35% in the days following the last earnings report, so this pullback may be partially based on a perception that the stock was overbought. The stock is an appealing play on a fading post office system, and growth prospects look strong. We'll learn more in the next quarterly report about the seriousness of the technical problems, but this appears to be simply a short-term matter. There's no reason to change your investing thesis based on today's drop.
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