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 Premier Global Services, (NYSE: PGI) jumped more than 11% Wednesday after the company announced an acquisition, and raised its 2014 earnings guidance.
So what: First, Premier Global announced it has acquired Europe-based fellow conferencing and collaboration provider Via-Box Limited for approximately $52.6 million, with the transaction funded through a combination of Premier Global's existing credit facility, and cash on hand. Trading under the name Powwownow, Via-Box serves approximately 240,000 active users in the U.K., and has a current projected annual revenue run rate of $22 million.
Better yet, PGi also estimates that next year's net revenue from continuing operations should be in the range of $560 million to $570 million, which should translate to non-GAAP diluted earnings per share from continuing operations of $0.85 to $0.88. By contrast, analysts were only expecting 2014 adjusted earnings of $0.81 on sales of $546.47 million.
Now what: What's more, the company also stated that sales of its SaaS-based products should increase more than 50% year-over-year in 2014, and will comprise more than 10% of its consolidated annual revenue run rate by the end of next year.
Even after today's pop, shares of PGI have only risen 6% so far in 2013, badly lagging the broader market. Even so, I think the stock looks cheap trading under 13 times next year's estimated earnings, so it could prove a bargain for patient long-term investors going forward.
