Why Oil-Dri Corporation of America's Shares Dropped

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 absorbent material maker Oil-Dri Corporation of America (NYSE: ODC  ) dropped 14% today after the company released earnings.

So what: Fiscal first quarter 2014 earnings are out and net sales were up 3% to $63.5 million and net income fell 36% to $2.9 million, or $0.41 per share. Higher manufacturing costs as well as increased marketing spending resulted in the weaker bottom line.  

Now what: Management even said it was disappointed in the results and investors sold off as well. The biggest concern I have is that higher manufacturing costs don't appear to be a short-term challenge because natural gas prices and packaging costs will likely continue to rise. I don't think there's a reason to buy today and would like to see more growth and margins improving before jumping in.

A stock to buy today
Looking for a buying opportunity right now? The Motley Fool's chief investment officer has just hand-picked one such opportunity in our new report: "The Motley Fool's Top Stock for 2014." To find out which stock it is and read our in-depth report, simply click here. It's free!


Read/Post Comments (0) | Recommend This Article (0)

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

Be the first one to comment on this article.

DocumentId: 2758140, ~/Articles/ArticleHandler.aspx, 4/18/2014 2:13:01 AM

Report This Comment

Use this area to report a comment that you believe is in violation of the community guidelines. Our team will review the entry and take any appropriate action.

Sending report...


Advertisement