The Motley Fool

Why Easyhome Ltd Shares Surged Today

Brian Pacampara, CFA | March 6, 2014| More on:

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.

What: Shares of merchandise leasing company easyhome Ltd. (TSX: EH) climbed 10% today after its quarterly results and outlook topped Bay Street expectations.

So what: The stock has soared over the past year on better-than-expected growth, and today’s Q4 results — adjusted EPS spiked 38% on a revenue increase of 11.8% — coupled with upbeat guidance suggests that demand is only accelerating. Additionally, operating margin at its main easyfinancial services segment expanded 680 basis points while same-store sales surged 66%, giving analysts plenty of good vibes over its competitive position as well.

Now what: For the full year 2014, management plans to open 30 to 35 easyfinancial locations with total revenue growth expected in the range of 10% to 12%. “Looking ahead, easyhome’s strategic focus remains unchanged,” wrote the company in a statement. “The Company will focus on evolving its delivery channels to better meet the needs of its customers, expanding the size and scope of easyfinancial and executing with efficiency and effectiveness.”

Of course, with the stock now up more than 90% from its 52-week lows, I’d wait for some of the excitement to fade before buying into those prospects.

5 Canadian Growth Stocks Under $5

We are giving away a FREE copy of our "5 Small-Cap Canadian Growth Stocks Under $5" report. These are 5 Canadian stocks that we think are screaming buys today.

Get Your Free Report Today

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium service or advisor. We’re Motley! Questioning an investing thesis — even one of our own — helps us all think critically about investing and make decisions that help us become smarter, happier, and richer, so we sometimes publish articles that may not be in line with recommendations, rankings or other content.

Fool contributor Brian Pacampara owns no position in any of the companies mentioned.

Two New Stock Picks Every Month!

Not to alarm you, but you’re about to miss an important event.

Iain Butler and the Stock Advisor Canada team only publish their new “buy alerts” twice a month, and only to an exclusively small group.

This is your chance to get in early on what could prove to be very special investment advice.

Enter your email address below to get started now, and join the other thousands of Canadians who have already signed up for their chance to get the market-beating advice from Stock Advisor Canada.