Why Advanced Drainage Systems Crushed the Market This Week

Water management solutions aren't ordinarily the stuff of investor dreams, but that sure wasn't the case with Advanced Drainage Systems (NYSE: WMS) over the past five trading days. The stock was quite a gusher, rising by almost 13% in price across the week, according to data compiled by S&P Global Market Intelligence.

The key event making ADS shareholders happy was the company's fourth-quarter earnings release. This, despite the fact that net sales decreased on a year-over-year basis by almost 9% to below $618 million. Happily for ADS and its investors, net income according to standards based on generally accepted accounting principles (GAAP) went far in the other direction, doubling and then some over the period to nearly $86 million ($1.07 per share).

Analysts tracking the stock were surely caught by surprise by the company's performance. After all, they were modeling only $567 million in revenue on average, not to mention a mere $0.79 for per-share GAAP net income.

Continue reading

Source Fool.com