Please ensure Javascript is enabled for purposes of website accessibility

Why GrafTech International Ltd.'s Shares Jumped Today

By Travis Hoium – Feb 27, 2014 at 12:00AM

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

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 investing thesis.

What: Shares of GrafTech International Ltd. (GTI.DL) are up 12% today after the company reported fourth-quarter earnings.

So what: The quarter wasn't all that strong with revenue down 17% from a year ago to $309 million and a loss of $0.03 per share, both well below estimates. But management said revenue would grow 15% to 20% this year, which implies a range of $1.34 billion to $1.4 billion, well ahead of the estimate of $1.24 billion from Wall Street.  

Now what: This is a classic example of forward guidance meaning more than reported performance because investors are clearly looking past a weak quarter. I will say that management's expectation of $150 million to $180 million in EBITDA is attractive given the company's $1.4 billion market cap and growth rate. I think there's room for the stock to run but management will have to meet or exceed the goals it set today for the stock to do well in 2014.

Travis Hoium has no position in any stocks mentioned. The Motley Fool owns shares of GrafTech International Ltd. 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.

Stocks Mentioned

GrafTech International Ltd. Stock Quote
GrafTech International Ltd.
GTI.DL

*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.

Related Articles

Premium Investing Services

Invest better with The Motley Fool. Get stock recommendations, portfolio guidance, and more from The Motley Fool's premium services.