Why Higher One Shares Popped
Feb 13th 2013 3:34PM
Updated Feb 13th 2013 4:20PM
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 Higher One Holdings are nearly 11% higher today despite the company offering somewhat tepid annual guidance. Wall Street seems to be more interested in the company's double beat on its completed quarter.
So what: Higher One posted $49.8 million in revenue for its fourth quarter, a 19.3% gain year over year and ahead of the $48.8 million consensus. Additionally, earnings per share, at $0.17, were a penny better than Wall Street's consensus. However, Higher One's guidance for 2013, at $210 million to $220 million, with EPS between $0.62 and $0.70 per share, is a double whiff on analyst expectations, which had been looking for $214.6 million in revenue and $0.73 in EPS.
Now what: At this point, Higher One is close to the bottom of a slide that began nearly from the day of its IPO in 2010. That's meant that, as earnings have increased, its P/E has also fallen, and it now stands near its all-time cheapest level. Maybe investors have decided that, at such a depressed price, even underwhelming growth projections are worth a bit of optimism.
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The article Why Higher One Shares Popped originally appeared on Fool.com.Fool contributor Alex Planes holds no financial position in any company mentioned here. Add him on Google+ or follow him on Twitter @TMFBiggles for more insight into markets, history, and technology. The Motley Fool has no position in any of the stocks mentioned. 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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