Why Energizer Holdings Inc. Shares Got Charged Up Today

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 Energizer Holdings  (NYSE: ENR  )  were trading over 13% higher today after the company released a solid fiscal second-quarter earnings report and also announced its intention to split into two separate publicly traded companies by the end of 2015.

So what: Energizer's second-quarter revenue was $1.06 billion, 3% lower than the year-ago quarter's result and also below Wall Street's $1.08 billion consensus estimate. However, the company's earnings of $1.88 per share easily topped Wall Street's $1.71 estimate. The company's full-year EPS guidance held firm in a range of $7 to $7.25, also mostly ahead of Wall Street's expectation for $7.06 in 2014 EPS.

Energizer's household products division (which includes its trademark batteries) and personal care unit (which produces shaving products, feminine products, and sunscreens) are each destined to become an independent public company by the second half of the 2015 fiscal year. The split will be engineered as a tax-free spinoff to shareholders, and the CEOs in charge of each division today will remain at the helm of their companies.

Now what: Energizer isn't exactly a growth stock these days, as it was trading essentially flat for the past year before today's pop, and the total growth of its revenue and free cash flow over the past five years has not even kept pace with inflation. This split will create one company that is stronger than the other, which is usually the case in such scenarios -- Energizer's personal care segment saw 21% revenue growth and 28% earnings growth from 2011 to 2013, while its household products segment saw revenue shrink by 5% and profit fall by 11% in the same time frame.

Investors are clearly excited about the opportunity to unlock value stored in Energizer's personal care segment, but it will be quite some time before that happens. Buying a company that averages barely any growth just to wait two years to get the real gems out of it seems like an unnecessary use of capital today. Put this one on your watchlist, but don't get excited just yet.

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