In our continuing effort to keep shareholder-owners of our Motley Fool Hidden Gems picks apprised of the goings-on at their companies, today we turn to measuring-device company FARO Technologies (NASDAQ:FARO) and the two pieces of news that made its month.

First up: earnings
Two weeks ago, FARO reported its first-quarter 2005 earnings to widespread acclaim. For some reason (see below), however, the company's popularity subsequently faded. As of this writing, the stock stands more or less at the same level it held prior to the earnings release: $28 and change.

Let's look first at what made the stock go up, and then at what dragged it down -- and why that's good news for Hidden Gem members. FARO's earnings jumped more than 31% over fiscal Q1 2004, backed by earnings growth of 22%. As starts go, this was a good one for the year 2005, in which FARO had actually been targeting sales growth of just 25% to 30%.

The company is now off to a running start, having hit part of its Q2 targets before even closing the book on Q1. What's more, there appears to be no robbing of Peter to pay Paul in this story. FARO also booked 31% more new orders in Q1 2005 than in Q1 2004, which means that sales growth later on this year should remain strong. That interpretation received further credence when FARO boosted its previous revenue guidance by 4% and its profit guidance by twice that amount.

Next: insider selling
On May 12, FARO's CEO sold 500,000 shares of FARO stock. Perhaps understandably, the company's value plummeted on the news -- unqualified as it was -- giving back all of the post-earnings news gains and then some. Foolish investors, however, were confused for at most a moment or two before hearkening back to Tom Gardner's interview with FARO's CEO, Simon Raab, in which Tom and Simon discussed management's use of a preplanned 10b5-1 schedule for diversifying management's stakes in the company. (And for anyone who missed the interview initially, "mikewa" from our helpful community of Foolish Hidden Gems members was quick to point it out.)

Long story short, the good news remains as good today as it was on May 9. The "bad" news remains as unimportant as it was one year ago. With the net effect that Fools can now buy FARO at the pre-good news price -- knowing what the news was/will be. How cool is that?

Want ongoing coverage of FARO and other small-cap companies? There's a free, no-obligation trial available for Motley Fool Hidden Gems. Check it out today.

Find further Foolish FARO philosophizing in:

Fool contributor Rich Smith does not own shares in FARO Technologies.