Water-Logged And Getting Wetter Stock Of The Day: Energizer Holdings (ENR)

Editor's Note: Any reference to TheStreet Ratings and its underlying recommendation does not reflect the opinion of TheStreet, Inc. or any of its contributors including Jim Cramer or Stephanie Link.

Trade-Ideas LLC identified Energizer Holdings ( ENR) as a "water-logged and getting wetter" (weak stocks crossing below support with today's range greater than 200%) candidate. In addition to specific proprietary factors, Trade-Ideas identified Energizer Holdings as such a stock due to the following factors:

  • ENR has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $57.3 million.
  • ENR has traded 287,771 shares today.
  • ENR traded in a range 209.3% of the normal price range with a price range of $3.32.
  • ENR traded below its daily resistance level (quality: 4 days, meaning that the stock is crossing a resistance level set by the last 4 calendar days. The resistance price is defined by the Price - $0.01 at the time of the signal).

Stocks matching the 'Water-Logged and Getting Wetter' criteria are worthwhile stocks to watch for a variety of factors including historical back testing and volatility. Trade-Ideas targets these opportunities because the stock is exhibiting an unusual behavior while displaying negative price action. In this case, the stock crossed an important inflection point; namely, "support" while at the same time the range of the stock's movement in price is twice its normal size. This large range foreshadows a possible continuation as the stock moves lower.

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More details on ENR:

Energizer Holdings, Inc. manufactures and sells primary batteries, portable lighting, and personal care products worldwide. It offers household and specialty batteries, including carbon zinc, alkaline, rechargeable, and lithium batteries. The stock currently has a dividend yield of 1.6%. ENR has a PE ratio of 20.9. Currently there are 8 analysts that rate Energizer Holdings a buy, no analysts rate it a sell, and 3 rate it a hold.

The average volume for Energizer Holdings has been 444,800 shares per day over the past 30 days. Energizer has a market cap of $7.7 billion and is part of the consumer goods sector and consumer non-durables industry. The stock has a beta of 0.67 and a short float of 3.9% with 5.09 days to cover. Shares are up 15.3% year-to-date as of the close of trading on Tuesday.

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TheStreetRatings.com Analysis:

TheStreet Quant Ratings rates Energizer Holdings as a buy. The company's strengths can be seen in multiple areas, such as its revenue growth, largely solid financial position with reasonable debt levels by most measures, reasonable valuation levels, expanding profit margins and solid stock price performance. We feel these strengths outweigh the fact that the company shows weak operating cash flow.

Highlights from the ratings report include:
  • ENR's revenue growth has slightly outpaced the industry average of 1.1%. Since the same quarter one year prior, revenues slightly increased by 1.7%. This growth in revenue does not appear to have trickled down to the company's bottom line, displayed by a decline in earnings per share.
  • The debt-to-equity ratio is somewhat low, currently at 0.91, and is less than that of the industry average, implying that there has been a relatively successful effort in the management of debt levels. Along with the favorable debt-to-equity ratio, the company maintains an adequate quick ratio of 1.31, which illustrates the ability to avoid short-term cash problems.
  • The gross profit margin for ENERGIZER HOLDINGS INC is rather high; currently it is at 50.61%. It has increased from the same quarter the previous year. Regardless of the strong results of the gross profit margin, the net profit margin of 5.70% trails the industry average.
  • Looking at where the stock is today compared to one year ago, we find that it is not only higher, but it has also clearly outperformed the rise in the S&P 500 over the same period, despite the company's weak earnings results. Turning our attention to the future direction of the stock, it goes without saying that even the best stocks can fall in an overall down market. However, in any other environment, this stock still has good upside potential despite the fact that it has already risen in the past year.

STOCKS TO BUY: TheStreet Quant Ratings has identified a handful of stocks that can potentially TRIPLE in the next 12 months. Learn more.

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