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 SouFun Holdings Ltd. (NYSE: SFUN ) fell nearly 10% Wednesday after the Chinese real estate Internet portal announced mixed first-quarter results and weaker-than-expected guidance.
So what: Quarterly revenue rose 33.2% year over year to $121.2 million, which translated to a 44% increase in adjusted net income to $47.8 million, or $0.11 per share. Analysts, on average, were expecting lower earnings of $0.09 per share on higher sales of $124.47 million.
For the full year 2014, SouFun sees total revenue between $780 million and $796 million, good for an increase of 22.5% to 25% over last year. By contrast, analysts were modeling significantly higher 2014 revenue of $816.29 million.
Now what: Despite SouFun's disappointing 2014 revenue guidance, it looks like much of the market's pessimism is already priced in; shares have fallen 36% year to date and now trade around 10 times next year's estimated earnings. Even if those estimates fall slightly as analysts have time to fully digest today's news, I think SouFun stock could prove a bargain for patient, long-term investors.
Are you ready to profit from this $14.4 trillion revolution?
SouFun faces a massive addressable market, but it's also not the only stock with great potential. And let's face it: Every investor wants to get in on revolutionary ideas before they hit it big -- like buying PC maker Dell in the late 1980s, before the consumer computing boom, or purchasing stock in e-commerce pioneer Amazon.com in the late 1990s, when it was nothing more than an upstart online bookstore. The problem is, most investors don't understand the key to investing in hypergrowth markets. The real trick is to find a small-cap "pure play" and then watch as it grows in explosive fashion within its industry. Our expert team of equity analysts has identified one stock that's poised to produce rocket-ship returns with the next $14.4 trillion industry. Click here to get the full story in this eye-opening report.