Why Aerovironment'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 drone and electric charging station maker AeroVironment (NASDAQ: AVAV  ) jumped 13% today after a hedge fund revealed its stake in the company.

So what: Engaged Capital said it owns 5.1% of the company and thinks that AeroVironment can unlock value by improving governance, disclosures, and its capital structure. Management said that it opens communication with stakeholders, but thinks it has the best strategy for the company already in place.  

Now what: This doesn't fundamentally change the company, but it does give investors a little confidence in their investment thesis. I recently wrote that two growth markets are still not performing well but long-term investors willing to stick with the company could see nice gains if it picks up. The bottom line is that one investor buying shares isn't a good reason to join in, but it might be time to make sure your investing thesis hasn't changed.

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

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