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Why Luxoft Holding Inc. Shares Popped Today

By Steve Symington - Mar 4, 2014 at 11:58PM

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Is Luxoft's jump 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 Luxoft Holding ( LXFT ) jumped more than 18% Tuesday after the IT solutions specialist held a conference call to reassure skittish investors in the wake of Russia's invasion of Ukraine.

So what: Of course, the Moscow Exchange's Micex index also jumped 5.3% today, and Luxoft's move follows a massive 30% plunge yesterday as investors feared the worst for its Ukraine operations.

But in addition to the broader rebound in companies with even a remote possibility of being affected by the situation, Luxoft management further allayed investors' fears by confirming its business operations in Kiev, Odessa and Dnepropetrovsk remain stable, with no disruptions in transportation, telecommunitation, or any other infrastructure and logistics.

Now what: Luxoft also reaffirmed its previously raised guidance for the fiscal year ending March 31, which called for revenue of at least $396 million and adjusted earnings of at least $1.70 per diluted share. Analysts are currently more optimistic on the bottom line, expecting current fiscal year earnings of $1.78 per share on sales of $395.78 million.

All things considered, and with shares valued at a reasonable 15.7 times next year's estimated earnings and still down 12% over the past three trading days alone, I think Luxoft stock could still prove a bargain for patient long-term investors.

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium advisory service. We’re motley! Questioning an investing thesis – even one of our own – helps us all think critically about investing and make decisions that help us become smarter, happier, and richer.

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