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 Dycom Industries jumped 14% today after announcing earnings and an acquisition.
So what: The company said it would buy a telecommunications subsidiary of Quanta Services for $275 million in cash. The acquisition is expected to add $0.05 to $0.10 per share in earnings.
It also said that fiscal first quarter revenue improved slightly to $323.3 million and net income fell slightly to $11.9 million, or $0.35 per share. That was slightly ahead of estimates
Now what: I'm not overly impressed by either the price of the acquisition or the earnings report. Dycom isn't getting a steal if it is only adding $0.10 (at most) to earnings, and with revenue falling, the earnings report wasn't a strong buy signal. I'll sit out today's move and look for growth elsewhere.
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The article Why Dycom Industries' 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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