Why Dycom Industries' 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 Dycom Industries (NYSE: DY  ) jumped 14% today after announcing earnings and an acquisition.

So what: The company said it would buy a telecommunications subsidiary of Quanta Services for $275 million in cash. The acquisition is expected to add $0.05 to $0.10 per share in earnings.

It also said that fiscal first quarter revenue improved slightly to $323.3 million and net income fell slightly to $11.9 million, or $0.35 per share. That was slightly ahead of estimates

Now what: I'm not overly impressed by either the price of the acquisition or the earnings report. Dycom isn't getting a steal if it is only adding $0.10 (at most) to earnings, and with revenue falling, the earnings report wasn't a strong buy signal. I'll sit out today's move and look for growth elsewhere.

Interested in more info on Dycom Industries? Add it to your watchlist by clicking here.

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Related Tickers

10/20/2016 4:02 PM
DY $84.81 Down -0.18 -0.21%
Dycom Industries CAPS Rating: ***