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 China XD Plastics (CXDC) were up as much as 10% today after the company turned in a strong first-quarter earnings report this morning.
So what: The auto-parts supplier said earnings per share increased nearly 50% to $0.34, while sales improved 30.8% to $223.6 million. The increase in sales came in part from a 14% uptick in selling prices as demand for automotive polymer composite materials rose. Earnings estimates were unavailable, but this report certainly makes the stock (with a P/E of about 4) look cheap on an earnings basis.
Now what: CEO Jie Han said the quarter reflected China XD's "strong execution of solidifying our leading position in the marketplace," and noted that higher prices helped drive a 380-basis-point jump in gross margin to 20.9%. The company also maintained its guidance for the year, calling for revenue of $950 million to $1.05 billion and earnings per share of $1.54 to $1.85. With solid financial results across the board, two Morgan Stanley affiliates on its board (which adds credibility to the stock), and a dirt cheap valuation, shares could easily move higher from here.
