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 Century Aluminum Co. jumped 10% after being upgraded by an analyst.
So what: JPMorgan Chase analyst Michael Gambardella increased both Century Aluminum and the better-known Alcoa to "overweight" because he thinks higher aluminum prices will help earnings. The company won't report earnings until at least mid-February, and Alcoa missed expectations for the fourth quarter, so the improvement Gambardella is expecting may not hit until later this year.
Now what: Stocks will often rise or fall short-term after an analyst rating change, but the truth is that Wall Street gets its calls wrong more often than not. Use this as a data point in your analysis but not the only reason to either buy or sell the stock. Long-term, it's earnings growth that will drive Century Aluminum, and we'll find out more about where earnings are headed sometime next month.
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The article Why Century Aluminum Co.'s Shares Jumped originally appeared on Fool.com.Fool contributor Travis Hoium and The Motley Fool have no position in any of the stocks mentioned. 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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