IT specialist Infosys Technologies (NASDAQ: INFY) issued Q2 earnings earlier today. According to Briefing.com, the numbers were pretty good in terms of beating estimates. Unfortunately, the market doesn't seem to like them.
Infosys made 56 cents per American Depositary Share. The call was for 50 cents. Net sales were $1.15 billion, slightly higher than projections on Wall Street. That sounds okay, right? We even had an outlook that was better than expected, too. Everything appears to have fallen in place for Infosys.
Unfortunately, as I write this, shares of Infosys are taking a beating. No, it's not the biggest beating I've ever seen in my investing life, but the company is trading down over 4% on high volume. What gives?
Well, looking at the actual press release, I see that there really wasn't any growth to the numbers, even though they went beyond what was expected of them. I don't think that's the reason why the stock is selling off, though.
In my mind, this is a classic case of taking profits. Maybe I'm wrong, but Infosys was so close to a 52-week high yesterday. Considering that it's gone up so much this year, it's not surprising that many investors wanted to book profits today.
If this is indeed the case, then you may want to look at Infosys as a potential trade. Getting in on today's weakness or maybe further weakness down the line, in the face of guidance that, in my opinion, isn't unattractive, might be a worthy move.
But you definitely have to perform due diligence on this one. Whenever you see the market acting in a very concerted fashion like this, you must make sure that you definitely disagree with the prevailing thesis. Otherwise, you could get caught in a badly-timed purchase. My overall point is that Infosys is an idea now, one that must be vetted carefully.
Disclosure: I don't own any company mentioned; positions can change without notice.
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