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 investment brokerage Piper Jaffray (NYSE:PIPR) jumped as much as 11% earlier in the trading session following the release of its third-quarter earnings results.
So what: To say that Piper Jaffray absolutely killed analysts estimates this quarter would still be doing the company an injustice. For the quarter, Piper Jaffray reported $1.11 in EPS considering both continuing and discontinued operations, with net revenue of $133 million. The consensus estimates from Wall Street had called for a mere $0.31 profit on $105.6 million in net revenue. Leading the beat-down on analyst's results was a huge rise in equity financing and fixed-income business, as well as a modest rise in its global asset management services. Piper Jaffray also announced it was exiting the Hong Kong capital markets business during the recently ended quarter.
Now what: Did I mention that it absolutely obliterated analyst estimates? OK, so this probably won't be the norm; growth should normalize, especially next year when its discontinued operations aren't factored into its bottom line. Still, assets under management have been on the rise, and a resurgence in equity financing deals have spurred growth in the past two quarters. If Piper Jaffray can keep these two operations moving higher, I could easily see the company's share price moving even higher as well.
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