What: Johnson Controls' (NYSE:JCI) shares fell roughly 14% last month and were down about 18% in 2015. However, it's been a real roller-coaster ride for the shares since last June.
So what: On June 10, Johnson Controls announced that it was looking at strategic options for its automotive experience business. This business represents about half of Johnson Control's top line, which helps explain why the shares started to fall at that point. They continued falling after the company announced it was planning to spin off the unit, tax free, to shareholders about a month or so later.
Then, leading into the company's fiscal fourth-quarter earnings release, the shares started to head higher again. Earnings, released on Oct. 29, ended up being relatively good reading, with solid numbers across the board if you exclude the impact of currency fluctuation. However, on Dec. 1, Johnson Controls announced its fiscal 2016 forecasts and provided a longer-term outlook for the two businesses that will remain after the auto spinoff. Investors were less than enthusiastic with the company's prognostications, and the shares started to head lower, even though the forecast was hardly bad (though not great by any means). One of the big negatives, however, is that costs associated with the spinoff are likely to be fairly large.
Now what: So the December share-price dive was kicked off by the company's near-term and long-term forecasts. But the real takeaway from the roller-coaster ride at Johnson Controls over the past six months or so is that the company is in a state of flux. And it will remain so until the automotive business is spun off, if not longer. That's left investors on edge, with emotions driving swift share-price moves. You can persuasively argue that Johnson Controls is a good investment idea or a bad one, depending on your view, but what's clear is that volatility is the name of the game. So unless you have a strong conviction about the outcome of Johnson Controls' spinoff and the businesses that are to be left behind, you're probably best sitting this one out.