January 31, 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 Pitney Bowes (NYSE: PBI ) jumped 18% today after the company released fourth-quarter earnings.
So what: Revenue fell 1% to $1.29 billion and net income dropped 57% to $110.3 million, or $0.55 per share, but it's all about expectations during earnings season. Analysts only expected $1.28 billion in revenue and $0.51 per share in earnings, which is lower than the $0.56 adjusted EPS number used for comparison, so shares surged higher today.
Now what: Pitney Bowes isn't a growth company but the market has thrown it out like there's no value left at all. Next year, management expects earnings of $1.85-$2.00 per share and free cash flow of $600 million-$700 million on at least flat revenue. That makes a $2.8 billion market cap and $14.09 share price look like a steal, even after today's jump. I think shares will continue to move higher.
Interested in more info on Pitney Bowes? Add it to your watchlist by clicking here.
More Expert Advice from The Motley Fool
The Motley Fool's chief investment officer has selected his No. 1 stock for the next year. Find out which stock in our brand-new free report: "The Motley Fool's Top Stock for 2013
." I invite you to take a copy, free for a limited time. Just click here
to access the report and find out the name of this under-the-radar company.