I first featured Bruker BioSciences (NASDAQ:BRKR) as a BHI Stock Pick back in March when the stock was trading at $9.42 a share. On Monday, the stock price ended trading at $11.51, near the 52-week high of $11.56.
The company released its first quarter 2007 numbers after the markets closed. Revenues increased by 16.5%, while operating income increasing 28.4% excluding acquisition related charges.
The stock then promptly lost more than 20% on Tuesday. Insiders continue to buy shares, revenue and profits continue to increase year over year, so why the huge drop? Were analysts expecting more?
Back on April 2nd, Bear Stearns lowered its outlook on Bruker from Peer Perform to Under Perform. The stock dropped from $10.40 to a day low of about $9.60, before finishing the day back above $10, and reaching its 52-week high a couple of weeks later.
The lower outlook by Bear Stearns was a curious move since it was one of the firms that underwrote Bruker's share offering back in February, at a price of $7.70 a share. I still firmly believe in Bruker, and I personally hold shares in my portfolio. Until I find a significant sign of trouble ahead I will continue to hold shares, but I will be sleeping with one eye open.
Bear Stearns knows something, and it is making me nervous.
Well, it seems my comments may have been an over-reaction on my part. As much of an over-reaction as was seen on Wall Street Tuesday after Bruker BioSciences (BRKR) stock plunged more than 20% following a pretty decent earnings report.
It seems that Bear Stearns released an opinion report to its clients following the conference call saying that while earnings were good, the stock is over-valued according to their valuation models.
The stock price sits at $9.08 as of noon Wednesday, still a decent gain from February's $7.70 stock offering, and a little lower than my entry point of $9.42. Given the polarizing effects of the Bear Stearns report and the stock offering, it seems that Bruker's stock might hover in this $9 range for a while.
Disclosure: Author owns shares in BRKR.
- Bruker BioSciences: Earnings Growing, Insiders Buying