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 adhesives and coatings maker Nordson
So what: We got a first-hand look today at precisely why the stock market and investors are forward-looking. For the second quarter, Nordson's revenue actually fell 1% to $315.2 million while its adjusted profit dipped to $0.84 from $0.95 in the year-ago period. Wall Street had been expecting a profit of $0.87 on sales of $321.2 million, so it's a miss on both accounts. However -- and it's a big however -- the company guided its fiscal-third-quarter EPS to a range of $0.96-$1.04 with revenue of $337 million to $349 million on strength it's seeing in new orders. That's well ahead of the $0.86 and $326 million the Street had expected.
Now what: An earnings miss now versus an earnings beat to come makes for some very confused investors. Overall, the two quarters balance each other out and make Nordson the perfect stock to watch from the sidelines. At 15 times forward earnings and with a 1% dividend yield, it's not a compelling buy, but also not overvalued. I'd keep an eye on the stock to see if it makes a large move in either direction and then look to re-examine it.
Craving more input? Start by adding Nordson to your free and personalized watchlist so you can keep up on the latest news with the company.
Fool contributor Sean Williams has no material interest in any companies mentioned in this article. You can follow him on CAPS under the screen name TMFUltraLong, track every pick he makes under the screen name TrackUltraLong, and check him out on Twitter, where he goes by the handle @TMFUltraLong.
Try any of our Foolish newsletter services free for 30 days. We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.