Why NewMarket's Shares Popped
Oct 26th 2012 5:34PM
Updated Oct 26th 2012 5:38PM
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 chemical company NewMarket (NYS: NEU) jumped 17% today, after the company reported earnings and a special dividend.
So what: Third quarter revenue fell slightly to $554 million, and net income dropped 9%, to $64.7 million, or $4.83 per share. Excluding special items, earnings were $4.91 per share, which came in ahead of estimates of $4.42.
Management also announced a special dividend of $25 per share, payable November 17. This is on top of the normal quarterly dividend of $0.75 per share, payable December 21.
Now what: An earnings beat is always a welcome sight, but we shouldn't lose sight of the fact that revenue and income are heading in the wrong direction. Analysts aren't expecting a quick recovery, and I'm not buying into the stock until operations improve. The stock is also up more than the special dividend, and I think there may be some pullback after the initial dividend-induced bounce.
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The article Why NewMarket's Shares Popped originally appeared on Fool.com.Fool contributor Travis Hoium has no positions in the stocks mentioned above. You can follow Travis on Twitter at @FlushDrawFool, check out his personal stock holdings or follow his CAPS picks at TMFFlushDraw. The Motley Fool has no positions in the stocks mentioned above. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.
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