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5 Solid Reasons You Should Invest in EnerSys (ENS) Now

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Premium battery manufacturer, EnerSys (ENS - Free Report) stock has enjoyed a solid run for the past year, appreciating 39.5% and easily outperforming the Zacks categorized Machinery-Electrical industry’s average gain of 19.8%, over the same time frame.

Encouragingly, the company has an average positive surprise of 3%, having beaten estimates thrice over the trailing four quarters. In second-quarter fiscal 2017, EnerSys’ earnings surpassed the Zacks Consensus Estimate by 6.5%, on the back of top-line expansion and diligent restructuring initiatives.

Further, the Zacks Rank #1 (Strong Buy) company still boasts robust fundamentals and is seeing improving prospects. This is reflected in analysts’ opinion as well, as the company has been witnessing solid activity on the earnings estimate revision front.

Here we have listed 5 reasons why we believe that EnerSys has room to grow even further:

Earnings per Share Growth: The company has achieved a remarkable average earnings growth of 13% over the past five years. This stands in comparison to the 9.3% growth of the industry. EnerSys also has an impressive projected EPS growth of 16.5% for the current year, in comparison to the industry’s expected decline of 5.3%.

Superior ROA: EnerSys’ Return on Assets (ROA) ratio is 8.4%, higher than the industry average of 6.5%. This indicates that the company uses its capital more efficiently & profitably as compared with the industry.

Fundamental Growth Picture: EnerSys operates in the lead-acid battery market and boasts one of the largest market shares in both its Reserve Power and Motive Power product business lines, both of which have bright growth prospects. The company is one of the dominant players in the global lead-acid battery market, with a projected compounded annual growth rate of 4.6% during 2014–2020, according to the “FMI” future market research.The company is also undergoing stringent restructuring initiatives, which will supplement profitability in the near future.

Analyst Sentiment Positive: Analysts have become increasingly bullish on the company over the past two months, as the Zacks Consensus Estimate for fiscal 2017 earnings has sharply trended up over the same time frame, from $4.39 to $4.58 per share, on the back of one upward estimate revision. Current quarter estimates have also trended up over the same time frame, rising 7.6% to $1.13.

ENERSYS INC Price and Consensus

Value Score Signals Future Upside: EnerSys’ currently has a Zacks Value Style Score of ‘A’, putting it into the top 20%, of all stocks we cover from this look. This makes EnerSys a solid choice for value investors, as our Value Style Score encompasses all valuation metrics into one actionable score. Our research shows that stocks with Style Scores of ‘A’ or ‘B,’ when combined with Zacks Rank #1 or #2 (Buy), offer the best upside potential.

Further, the company also has a Zacks VGM score of ‘A’. Our VGM Score identifies stocks that have the most attractive value, growth, and momentum characteristics, and a good VGM score indicates stronger chances of success. (You can read more about the Zacks Style Scores here>>). All things considered, EnerSys seems to have pretty striking prospects.

Other Stocks Worth a Look

Some other favorably placed stocks in the broader sector include AO Smith Corp. (AOS - Free Report) , ABB Ltd. and The Middleby Corporation (MIDD - Free Report) . All the three companies carry a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank stocks here.

Headquartered in Milwaukee, WI, A.O. Smith is one of the leading manufacturers of commercial and residential water heating equipment, as well as water treatment products of the world. The company also boasts a striking earnings surprise history, and has an average positive surprise of 5.9% over the trailing four quarters, beating estimates all through.

Swiss engineering giant, ABB Ltd. provides power and automation technologies for utility and industrial customers worldwide. The company has an excellent earnings surprise history, beating estimates each time over the trailing four quarters, with an average positive surprise of 23.5%.

Based in Elgin, IL, Middleby Corporation makes commercial foodservice, food processing, and residential kitchen equipment. The company’s earnings have surpassed estimates in each of the trailing four quarters, resulting in an average surprise of 15.9%.

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Enersys (ENS) - free report >>

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