Why Sealed Air's Shares Jumped
Feb 19th 2013 4:38PM
Updated Feb 19th 2013 5:45PM
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 Sealed Air , best known as the maker of bubble wrap, jumped as much as 20% today after the company reported earnings.
So what: Fourth-quarter revenue rose slightly to $1.98 billion and came in ahead of the $1.94 billion analysts expected. Earnings per share of $0.34 were $0.05 better than estimates, which was really what got investors excited today.
Now what: The quarterly results were a surprise, but I'm taking a cautious look given the $1.10- to $1.20-per-share profit estimate for next year. That puts the stock near a 20 forward P/E multiple, a steep price for a company that's barely growing. I'll stay away from this pop today and look for a better entry point in the future.
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The article Why Sealed Air's Shares Jumped originally appeared on Fool.com.Fool contributor Travis Hoium has no position in any stocks mentioned. You can follow Travis on Twitter at @FlushDrawFool, check out his personal stock holdings, or follow his CAPS picks at TMFFlushDraw. The Motley Fool owns shares of Sealed Air. Try any of our Foolish newsletter services free for 30 days. We Fools don't 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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