Why Shares of GrafTech International Ltd Jumped 14% Today

By Markets Fool.com

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.

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What: Shares of high-tech materials company GrafTech International Ltd jumped as much as 14% today after it reported earnings.

So what: First-quarter revenue fell 26% to $207 million and net loss grew from $12 million to $56 million, or $0.41 per share. Adjusted loss, which pulls out one-time items, was $0.10 per share, $0.05 worse than estimates.

Now what: Usually missing estimates will send a stock sharply lower, but along with earnings GrafTech announced a $150 million preferred equity investment by Brookfield Asset Management. It also revealed that Brookfield plans to announce a tender offer for shares of GrafTech International stock for $5.05 per share.

These two actions more than earnings are driving shares higher today. Clearly, the managers at Brookfield are bullish on the company's future, and with a potential offer for shares at $5.05 per share on the table today, I don't see a reason to sell. However, earnings aren't strong enough for me to be very bullish on the stock, either.

The article Why Shares of GrafTech International Ltd Jumped 14% Today originally appeared on Fool.com.

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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.