Please ensure Javascript is enabled for purposes of website accessibility

Why Shares of EnerSys Fell 13% in January

By Travis Hoium - Feb 8, 2016 at 1:45PM

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

Declining demand last year pushed EnerSys shares lower last month.

What: Shares of battery company EnerSys (ENS -1.44%) dropped 13.4% in January as business conditions declined.

So what: Fiscal third-quarter results announced at the end of January showed a 6% decline in revenue to $573.6 million and net income fell 22% to $38.5 million, or $0.92 per share on an adjusted basis. Most of the decline was due to weaker demand in the Middle East and Asia and a strong dollar made declining demand look even worse.  

It didn't help sentiment that most energy and industrial suppliers are down as a result of declining demand. EnerSys' quarterly results were just a reminder of how much this business has slumped.

Now what: With customers putting off spending because of low commodity prices, I don't see a near-term improvement in operations. But shares do trade at just 11 times forward earnings estimates and EnerSys has been able to remain solidly profitable amid dropping demand. Eventually demand will pick back up, and when it does, investors buying at the current valuation could benefit.

Invest Smarter with The Motley Fool

Join Over 1 Million Premium Members Receiving…

  • New Stock Picks Each Month
  • Detailed Analysis of Companies
  • Model Portfolios
  • Live Streaming During Market Hours
  • And Much More
Get Started Now

Stocks Mentioned

EnerSys Stock Quote
EnerSys
ENS
$60.09 (-1.44%) $0.88

*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.

Related Articles

Motley Fool Returns

Motley Fool Stock Advisor

Market-beating stocks from our award-winning analyst team.

Stock Advisor Returns
332%
 
S&P 500 Returns
115%

Calculated by average return of all stock recommendations since inception of the Stock Advisor service in February of 2002. Returns as of 06/28/2022.

Discounted offers are only available to new members. Stock Advisor list price is $199 per year.

Premium Investing Services

Invest better with The Motley Fool. Get stock recommendations, portfolio guidance, and more from The Motley Fool's premium services.