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 Valassis Communications (UNKNOWN:VCI.DL) crashed by nearly 15% this morning but have since clawed their way back to a loss of about 8%, on a double whiff on first-quarter earnings and an underwhelming set of forward guidance.
So what: Valassis reported revenue of $482.5 million and earnings of $0.54 per share, which missed Wall Street's consensus of $489.9 million and $0.69 per share, respectively. The EPS miss was a big one, and it certainly played into Valassis' new guidance range of $3.05 to $3.20 per share, a reduction from the earlier $3.50 guidance and a big miss on the current consensus of $3.44 per share.
Now what: Valassis is pretty inexpensive today, with a P/E in the single digits after its drop, and a hefty 4.6% dividend. However, a reduction in guidance does present some concern that the company's core business is weakening. It could be a great buying opportunity, but it might also be a value trap. Diligent investors should take this as an opportunity for more research.
Want more news and updates? Add Valassis to your Watchlist now.
Fool contributor Alex Planes holds no financial position in any company mentioned here. Add him on Google+ or follow him on Twitter, @TMFBiggles, for more insight into markets, history, and technology.
The Motley Fool has no position in any of the stocks mentioned. 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.