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 commodity specialist The Andersons
So what: As if we needed another reminder of how strong the agricultural sector has been lately, Andersons blew away Wall Street's earnings expectations. The $1.39 in fourth-quarter earnings per share easily topped the $0.87 that analysts were looking for. Revenue of $1.2 billion -- up 31% from last year -- also beat expectations. It was the company's ag businesses that drove the quarterly results with the grain and ethanol and plant nutrient groups both reporting record operating income. The results from the rail, turf and specialty, and retail groups weren't quite as impressive, but Andersons' management seems to think those businesses will turn with the economy.
Now what: While there are longer-term drivers in the food and agriculture industries, current conditions have been very much in favor of companies like Andersons. This favorable environment could continue for a while, but investors may want to be careful about projecting similar growth too far out into the future. Of course even after the stock's big jump today, shares are trading at less than 17 times the company's average five-year earnings, so it doesn't appear that investors have gotten too carried away yet.
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Fool contributor Matt Koppenheffer does not own shares of any of the companies mentioned. You can check out what Matt is keeping an eye on by visiting his CAPS portfolio, or you can follow Matt on Twitter @KoppTheFool or on his RSS feed. The Fool's disclosure policy prefers dividends over a sharp stick in the eye.