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 air cargo specialist Atlas Air Worldwide
So what: A SunTrust Robinson Humphrey analyst downgraded Atlas Air from "buy" to "neutral," triggering today's sell-off. The call follows a second-quarter earnings report that topped expectations, but left investors feeling flat after the company lowered its full-year outlook.
Now what: The market action today suggests that investors are shooting first and asking questions later when it comes to Atlas. But should they? Management's lowered guidance would have the company pulling in $5 per share for all of 2011. If the company can manage that, then shares would currently be trading at just a bit more than seven times earnings. A downgrade like this can be a good reason for investors to revisit their assumptions, but it doesn't necessarily mean that long-term investors need to rush to hammer the sell button.
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Fool contributor Matt Koppenheffer does not have a financial interest in 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 Facebook. The Fool's disclosure policy prefers dividends over a sharp stick in the eye.