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 building products maker Ply Gem (NYSE: PGEM ) fell 19% today after reporting earnings.
So what: The company reported a 19.8% rise in sales to $368.1 million, which did come in slightly ahead of estimates. But bet loss was $50.9 million, or $0.90 per share, and even earnings from operations fell $6.7 million to $24.2 million.
Now what: Weather was blamed for some of the disappointment and higher costs in anticipation of demand growth has hurt the bottom line. It's that decline in gross margin that has me most concerned and would keep me out of the stock today. Until management proves it can control costs the company won't live up to its $1 billion valuation, especially when you consider its $828 million debt load.
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