Why Meritor's 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 automotive equipment supplier Meritor (NYSE: MTOR  ) jumped 23% today after the company released earnings.

So what: Sales dropped 22% to $908 million and the company reported a net loss of $4 million, or $0.04 per share. Revenue fell short of estimates but investors are clinging to adjusted earnings per share of $0.06, which came in a penny ahead of expectations.  

Now what: Investors are betting on a big turnaround for Meritor and management is hoping for adjusted earnings of $0.25-$0.35 per share this year. I just don't like the trends we're seeing right now from a revenue perspective. I'm going to leave this move alone today and wait for more sound fundamentals before looking at the stock again.

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

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Related Tickers

9/27/2016 3:06 PM
MTOR $10.56 Down -0.01 -0.05%
Meritor CAPS Rating: **