January 8, 2013
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 information publisher IHS (NYSE: IHS ) jumped as much as 13% in early trading after reporting earnings.
So what: The company said that revenue rose 12% to $414.2 million in the fourth quarter, well ahead of the $409.9 million analysts expected. Net income more than doubled to $46.4 million and excluding one-time items came in at $1.21 per share, also above estimates of $1.11.
Now what: This was a good quarter, but the stock also came with some strange movements today. The stock opened at $109.69, which was the high point of the day and may have been a sign of a little overexuberance on the part of one or two investors. Shares quickly fell to $100 and closed at $102.09. That's still a nice 5.6% gain but nothing like what we saw earlier.
It's often wise to stay away from trading in the first few minutes and the last few minutes of the day, until market makers get their bids and asks in and trading reaches a normal level -- and this is exactly why. Just a couple of hundred shares traded at today's high, and the buyer quickly lost nearly $10 per share in value. But after shares pulled back, I think this stock provides a nice buying opportunity for investors, considering the growth and earnings momentum from IHS.
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