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: Industrial lift and material handling equipment maker Terex Corporation (NYSE:TEX) saw its stock jump as much as 11% this morning before settling in with a sustained 7.5% gain for much of the trading day on Feb. 18.
So what: Terex reported financial results for the fourth quarter after market close on Feb. 17, with earnings surpassing analyst expectations, though revenue came in short of both analyst expectations, and actually declined from the year-ago period.
Now what: Beyond a relatively good earnings report, it's hard to say exactly what is driving the strong bounce-back for the stock. In addition to better-than-expected profits, the company announced it would increase the dividend, and initiate another $200 million share buyback program after completing the prior one last quarter.
After today's recovery, the stock is about even for 2015 after being down almost 20% at one point. However, shares remain down nearly 40% over the past year. While there has been some improvement, the company continues to operate in a weak environment. Until demand for its industrial and construction-targeted equipment rebounds, that will likely remain the case. Profit growth is likely to come from operational improvements and cost-control in the interim.