Snap These Up After the Overreactions

Earnings can be a tumultuous time. The pace of information flow is frenetic and nerves run high, so we can see big share swings even on modest expectation misses or better-than-expected forecasts. While many will quickly hone in on Apple (AAPL) and Netflix (NFLX) as prime examples of the former and the latter from last week, I tend to look for those companies that suffered a negative overreaction despite favorable underlying data. 

For example, IIVI (IIVI) shares dropped fell 15% last Tuesday following the company's earnings release, even though order bookings rose 11% sequentially and operating margin came in at 12%, up from last year's 11%. Yes, the company missed prior guidance: Earnings totaled $0.19 per share, lower than its own forecast of $0.20 to $0.22. But, in my view, the strength of the order book more than compensated for that, particularly given the 15% drop in the shares....342 more words left in this article. To read them, just click below and try Real Money FREE for 14 days.

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