Tuesday, February 26, 2013

Why A.M. Castle’s Shares Dropped

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 A.M. Castle & Co. (NYSE: CAS  ) fell as much as 21.5% briefly this morning after recovering to a slight decline for the day.

So what: The company came out with earnings this morning, which is why there was a big fuss. Revenues fell 2.9% to $274 million and loss per share was $0.24, both well below estimates. This created the conditions for a strange open where 700 shares�traded hands at $13.38 in the first minute the stock traded before shares popped back to normal. �

Now what: Once you look past the strange trading it's surprising the stock hasn't fallen further today. Analysts had expected a $0.10 per share so the quarterly performance was far worse than expected. I don't see any reason to buy today considering the deterioration in results.

Interested in more info on A.M. Castle? Add it to your watchlist by clicking here.

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