Q: Confused about LMN. Results weren't great. 5i warned before market opened on Monday that direction of stock was in doubt so you suggested a hold rating. Then on Monday, LMN increases 11% on decent volume for the stock. What gives? What positives do others see? Did 'new' news come out? I realize being an off shoot of CSU is a big plus.
5i Research Answer:
It is a hard stock to predict. It could easily have declined on the same quarterly release on a differing day. There was no new news; we were cautious as there was little discussion of acquisitions and organic growth was horrible. But investors seem to take comfort in that a) it wasn't as bad as feared, and b) revenue was higher than estimates. Trading volume was high, so some investors likely predicted a bottom. One day of course does not make a trend. We still like it overall, but it is a bit of a strange trader at times.