Why OSI Systems' Shares Jumped

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 electronics systems designer OSI Systems jumped as much as 21% in afternoon trading after reaching a settlement with the government.

So what: Management said it had reached a settlement with the Department of Homeland Security over issues with its Rapiscan passenger scanning product and its software. The deal will allow the company to continue other work for the U.S. government, and bid on projects in the future. 


Now what: The issues with Rapiscan had led to the Department of Homeland Security proposing a suspension of any other selling activity to the agency by the company, which would have been a huge blow. This agreement lifts that cloud, although we know very little about what the agreement entails. I don't think this is a buy sign with government spending falling, but it's a positive development nonetheless.

Interested in more info on OSI Systems? Add it to your watchlist by clicking here.

The article Why OSI Systems' Shares Jumped originally appeared on Fool.com.

Fool contributor Travis Hoium has no position in any stocks mentioned. 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.

Copyright © 1995 - 2013 The Motley Fool, LLC. All rights reserved. The Motley Fool has a disclosure policy.

Learn about investing from the comfort of your own home.

Portfolio Basics

Take the first steps to building your portfolio.

View Course »

Investment Strategies

Learn the strategies you need to build a winning portfolio

View Course »

Add a Comment

*0 / 3000 Character Maximum