Why Shares of Stock Building Supply Holdings, Inc. Jumped Today

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 product distributor Stock Building Supply Holding, Inc. (NASDAQ: STCK  ) jumped more than 10% briefly today after reporting earnings.

So what: Fourth-quarter net sales were up 21% to $305.2 million and the company swung to a net income of $3.0 million, or $0.11 per share, from a loss last year. Analysts were only expecting revenue of $299.8 million and earnings of $0.06 per share.  

Now what: Increased margins were a result of cost-cutting measures as well as the ability to spread fixed costs over a larger sales base. In this seasonally slow quarter it was positive to see the return to a profit. There are big hopes for the next year: Wall Street is expecting $0.91 per share in earnings in 2014 and given the momentum of sales growth I think shares will continue to rise as expectations are adjusted higher.

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