Why Demandware Inc. Shares Popped 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 Demandware Inc. (NYSE: DWRE  ) rose 10% to start the week following speculation it could be a takeout target.

So what: With shares of Demandware having drifted downward in recent weeks despite turning a narrower-than-expected first quarter loss earlier this month,, FBR Capital's Daniel Ives recently suggested would do well to acquire Demandware for its enterprise cloud commerce solution.

Now what: Still, Demandware isn't exactly cheap, trading around 16 times trailing 12-month sales and 340 times next year's estimated earnings, and even that's a big premium to pay for Salesforce, which itself is still striving to achieve sustained profitability. While such a deal could certainly fall into place, don't count on it as a crucial part of your investing thesis. For now, I'm perfectly happy continuing to watch Demandware from the sidelines.

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Steve Symington

Technology and consumer goods specialist for the Fool. Steve looks for responsible businesses which positively shape our lives. Then, he invests accordingly. Enjoy his work? Connect with him on Twitter & Facebook so you don't miss a thing.

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