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On May 10, we issued an updated research report on Enersys (ENS - Free Report) .
Over the past month, this Zacks Rank #3 (Hold) stock has declined 4.3% compared with industry’s fall of 3.9%.
Existing Scenario
Enersys has been gaining from its solid product portfolio, favorable pricing and higher sales from major businesses (like motive power). Also, the company has taken steps to strengthen American and Asian operations, and reserve power business in Europe, the Middle East and Africa. These restructuring actions are likely to benefit the company’s operational performance in the upcoming quarters. Notably, its sales are estimated to grow 10% year over year in fiscal 2019.
Moreover, Enersys intends to strengthen its competency on the back of business acquisitions. The buyout of Alpha Technologies Group of Companies (completed in December 2018) will enhance the company's product portfolio across the telecom, broadband, industrial and renewable markets. Also, the company anticipates realizing synergies of more than $25 million on an annualized basis. In addition, earnings accretion of 6 cents per share — partially offset by 3 cents of dilution caused by share issuances — is anticipated in fiscal 2019.
Further, the company remains highly committed toward increasing shareholders’ wealth through share repurchase programs and paying dividends. In this regard, in the first three quarters of fiscal 2019, it used $22.3 million for paying dividends to shareholders and $25 million for purchasing treasury stocks.
However, rising cost of sales has been a major concern for EnerSys over the past several quarters. In the third quarter of fiscal 2019, the company’s cost of sales increased 4.8% on a year-over-year basis despite cost-reduction initiatives. Notably, commodity inflation hurt gross margins by around 120 basis points. Escalating costs may continue affecting the company's margins in the upcoming quarters.
iRobot surpassed estimates in each of the trailing four quarters, the average being 94.52%.
DXP Enterprises exceeded estimates thrice in the trailing four quarters, the average being 48.47%.
Dover surpassed estimates in each of the trailing four quarters, the average being 8.61%.
Biggest Tech Breakthrough in a Generation
Be among the early investors in the new type of device that experts say could impact society as much as the discovery of electricity. Current technology will soon be outdated and replaced by these new devices. In the process, it’s expected to create 22 million jobs and generate $12.3 trillion in activity.
A select few stocks could skyrocket the most as rollout accelerates for this new tech. Early investors could see gains similar to buying Microsoft in the 1990s. Zacks’ just-released special report reveals 7 stocks to watch. The report is only available for a limited time.
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Enersys (ENS) Displays Bright Prospects, Headwinds Persist
On May 10, we issued an updated research report on Enersys (ENS - Free Report) .
Over the past month, this Zacks Rank #3 (Hold) stock has declined 4.3% compared with industry’s fall of 3.9%.
Existing Scenario
Enersys has been gaining from its solid product portfolio, favorable pricing and higher sales from major businesses (like motive power). Also, the company has taken steps to strengthen American and Asian operations, and reserve power business in Europe, the Middle East and Africa. These restructuring actions are likely to benefit the company’s operational performance in the upcoming quarters. Notably, its sales are estimated to grow 10% year over year in fiscal 2019.
Moreover, Enersys intends to strengthen its competency on the back of business acquisitions. The buyout of Alpha Technologies Group of Companies (completed in December 2018) will enhance the company's product portfolio across the telecom, broadband, industrial and renewable markets. Also, the company anticipates realizing synergies of more than $25 million on an annualized basis. In addition, earnings accretion of 6 cents per share — partially offset by 3 cents of dilution caused by share issuances — is anticipated in fiscal 2019.
Further, the company remains highly committed toward increasing shareholders’ wealth through share repurchase programs and paying dividends. In this regard, in the first three quarters of fiscal 2019, it used $22.3 million for paying dividends to shareholders and $25 million for purchasing treasury stocks.
However, rising cost of sales has been a major concern for EnerSys over the past several quarters. In the third quarter of fiscal 2019, the company’s cost of sales increased 4.8% on a year-over-year basis despite cost-reduction initiatives. Notably, commodity inflation hurt gross margins by around 120 basis points. Escalating costs may continue affecting the company's margins in the upcoming quarters.
Key Picks
Some better-ranked stocks in the same space are iRobot Corporation (IRBT - Free Report) , DXP Enterprises, Inc. (DXPE - Free Report) and Dover Corporation (DOV - Free Report) . While iRobot sports a Zacks Rank #1 (Strong Buy), DXP Enterprises and Dover carry a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
iRobot surpassed estimates in each of the trailing four quarters, the average being 94.52%.
DXP Enterprises exceeded estimates thrice in the trailing four quarters, the average being 48.47%.
Dover surpassed estimates in each of the trailing four quarters, the average being 8.61%.
Biggest Tech Breakthrough in a Generation
Be among the early investors in the new type of device that experts say could impact society as much as the discovery of electricity. Current technology will soon be outdated and replaced by these new devices. In the process, it’s expected to create 22 million jobs and generate $12.3 trillion in activity.
A select few stocks could skyrocket the most as rollout accelerates for this new tech. Early investors could see gains similar to buying Microsoft in the 1990s. Zacks’ just-released special report reveals 7 stocks to watch. The report is only available for a limited time.
See 7 breakthrough stocks now>>