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: Mueller Water
So What: "4%?" you ask. "So what?" And I admit, that's not a lot to get excited about. While I won't sneeze at a 4% gain, it certainly is a lot less than the 10% bump in share price that Mueller was enjoying earlier in the day. But should investors jump on the pullback, and buy before the stock goes back up?
Now What: Actually, no, you shouldn't -- because I'm not at all convinced Mueller will go back up. The 10% gain just may have been the high water mark. Consider: Mueller missed sales estimates yesterday, reporting a bare 3% gain year over year. It missed -- or at best, matched -- consensus targets for earnings, reporting a $0.09 loss ($0.07 pro forma), versus Wall Street estimates of $0.07. Worst of all, the company's already low level of free cash flow -- for which I criticized Mueller back in January -- constricted even further in the first quarter.
Will investors heed Rich's advice, or pile back aboard and refloat Mueller's boat? Follow the story and add Mueller Water to your Watchlist.