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 Chinese oil and gas equipment maker WSP Holdings
So what: WSP announced today that its subsidiary, Wuxi Seamless Oil Pipes Co., received an order for roughly $92 million from PDVSA Services, the state procurement office of Venezuela's state-owned Petroleos de Venezuela. Is that a big deal? You bet it is. For the 12 months ending in September, WSP's total revenue was $482 million, so this single order represents a very significant chunk of change for the company. WSP expects delivery of the order will be completed by February.
Now what: Of course the question here is whether the order justifies the massive jump in the stock. The amount of the order alone may not, but for a stock that has lost more than half its value over the past year (and that's taking today's action into account), the order may have been a much-needed shot of confidence for investors. However, for those on the sidelines thinking about jumping in, caution may be the watchword as the initial excitement could wear off over the next few days.
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