Why Resources Connection 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 Resources Connection  (NASDAQ: RECN  ) jumped as much as 12% today after the business consulting company released fiscal second-quarter earnings.

So what: Revenue was up 10.9% sequentially and 3.4% year over year to $146 million. Net income was up 20.1% to $7.1 million, or $0.18 per share, beating analysts' estimate of $0.15.  

Now what: Management said customers are willing to look into doing more large-scale projects, which opens up opportunities in the future. But before we get too excited about the improvement, keep in mind that the company missed earnings by $0.03 last quarter, so not all results were positive. Shares trade at 28 times this year's earnings estimates, so the low growth rate year over year and a high multiple will keep me out of the stock right now.

One stock you can buy today
There are still plenty of opportunities on the market and The Motley Fool's chief investment officer has selected his No. 1 stock for 2014, and it's one of those stocks that could make you rich. You can find out which stock it is in the special free report: "The Motley Fool's Top Stock for 2014." Just click here to access the report and find out the name of this under-the-radar company.


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.

Sponsored Links

Leaked: Apple's Next Smart Device
(Warning, it may shock you)
The secret is out... experts are predicting 458 million of these types of devices will be sold per year. 1 hyper-growth company stands to rake in maximum profit - and it's NOT Apple. Show me Apple's new smart gizmo!

DocumentId: 2782853, ~/Articles/ArticleHandler.aspx, 9/23/2014 10:29:30 PM

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