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Why Liquidity Services, Inc. Shares Jumped

By Jeremy Bowman – Feb 7, 2014 at 4:31PM

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Is this meaningful? Or just another movement?

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 thesis.

What: Shares of Liquidity Services, (LQDT 1.12%) were flowing higher today, gaining as much as 21% after a strong first-quarter earnings report.

So what: The scrap-and-salvage specialist delivered earnings of $0.32 a share, better than estimates of $0.22, while revenues edged down 0.2%, to $121.9 million, easily topping the consensus at $111.2 million. Current-quarter guidance was weak, but full-year guidance was strong as the company sees a per-share profit of $1.60-$1.76 against estimates of $1.60. CEO Bill Angrick credited strong performance in the retail supply chain and municipal government businesses for the better-than-expected quarter.

Now what: Though Liquidity's full-year EPS estimates were ahead of the consensus, Angrick did say that the company was maintaining a cautious outlook, citing "volatility in the macro environment." Liquidity has been on a downswing of late, having peaked at more than $60 a share in 2012. As a seller of inferior goods, however, the company could be a good place in which to put your money, for those who fear a market correction. The company also appears to be stabilizing after seeing profits dwindle lately.

Jeremy Bowman has no position in any stocks mentioned. The Motley Fool recommends Liquidity Services. We Fools may not 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.

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Stocks Mentioned

Liquidity Services Stock Quote
Liquidity Services
LQDT
$16.22 (1.12%) $0.18

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