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 MRC Global (NYSE:MRC) fell as much as 16% today after the company said sales will miss expectations.
So what: A regulatory filing today said that line pipe sales in April and May will be about $100 million below expectations. Overall, sales will be down about 10% from a year ago as demand for drilling pipe comes in lower than expected and crude oil pipelines high approval delays.
Now what: This is bad news for the company's operations and for the full year management expects line pipe sales to be down about $300 million. With the stock trading at 23 times trailing earnings a decline in revenue makes the stock look even more expensive. I see this as a pressure for the company all year and wouldn't consider buying in until we see a pickup in demand in the line pipe business.
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