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 specialty chemicals maker American Vanguard Corp. (AVD -1.50%) fell 12% today after reporting earnings.
So what: First quarter sales fell 33% to $81.1 million, and net income dropped 87% to $2.2 million, or $0.07 per share. Poor weather in the Midwest this spring pushed back the planting season, and Wall Street had already priced that into earnings per share, expected at $0.03.
Now what: There's uncertainty in end markets given low corn prices and the poor weather so far this year. When combined with high levels of inventory at American Vanguard and in the sales channel, it looks like 2014 will be a rough year overall. While I think results will improve this year, I think shares are still expensive given the cautious outlook and 18 forward P/E ratio.
