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 CommScope Holding Company, (NASDAQ: COMM ) jumped 10% Friday after the communications infrastructure specialist raised its forward guidance.
So what: Citing strength in its wireless business, CommScope now expects first-quarter sales of $900 million to $925 million, the midpoint of which represents 13% growth over the same year-ago period. That should translate to 29% growth in adjusted earnings per share to a range of $0.43 to $0.47.
Now what: For reference, CommScope soared 20% exactly one month ago when it reported better-than-expected fourth-quarter results. At the time, management told investors to expect Q1 revenue of $860 million to $900 million, and adjusted earnings per share of $0.36 to $0.40. Though shares pulled back slightly after that pop, today's jump means CommScope investors are sitting on a year-to-date gain of roughly 29%.
Even so, I think the stock actually looks cheap trading right around 1.2 times last year's sales and 12.9 times next year's estimated earnings. Keeping in mind those estimates are likely to increase -- and if CommScope can maintain its momentum over the long run -- there's no reason it can't continue rewarding patient investors from here.
Good things come to those who wait...
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