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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 HVAC-service provider Comfort Systems USA (NYSE: FIX ) were heating up today, gaining as much as 13% on a promising earnings report.
So what: Comfort Systems turned in a per-share profit of $0.07, much better than the $0.02-loss the market was expecting. Revenue, however, was about 1% below estimates at $325.9 million. On another positive note, CEO Brian Lane noted that the company's backlog increased in the quarter, and gross margin improved 13.1%, to 15.8%, as revenue was essentially flat year over year.
Now what: While management noted the difficult current economic climate, Comfort Systems could be a strong long-term macroeconomic play, as electricity costs are likely to go down with the proliferation of fracking and the adoption of natural gas by utility companies. The cost savings could encourage more Americans to adopt central air conditioning systems, Comfort's bread-and-butter. I also think this could be a favorable climate-change play, as hot summers will lead to higher demand for air conditioning. Stay on top of Comfort Systems to find what happens. Just add the company to your Watchlist here.