Investment Ideas from Alpari: Energizer

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Investment Ideas from Alpari - Energizer
Investment Ideas from Alpari - Energizer

Energizer is one of the world’s largest manufacturers and distributors of batteries for household appliances, highly specialised batteries, and lighting devices. Energizer created the first household battery in 1896. Today, the company employs around 4,400 people. The company’s revenue is distributed as follows: North and South America – 64.4%; Europe, Middle-East, and Africa – 19.9%; Asia-Pacific region – 15.7%. Among the company’s major shareholders are: BlackRock (8.94%), JPMorgan Chase & Co (6.35%), Bank of America Corporation (3.62%), UBS (0.85%), Deutsche Bank AG (0.61%), Morgan Stanley (0.55%), Rothschild & Compagnie Gestion (0.04%).

Growth factors:

  • Energizer is planning to expand its reach in various market sectors with the combined help of its global logistics network, production facilities, and marketing departments. The company is already making progress on this objective; in the 3rd quarter of 2017, the company’s revenue grew by 25.03% QoQ, while the EBITDA indicator grew by 14.72% QoQ. Additionally, in order to realise this goal, Energizer is actively investing in development as well as increasing capital expenditure (the latter, for example, grew by 48.08% QoQ in the 3rd quarter of 2017).
  • Continued successful implementation of a strategy to reduce overheads and maximise cash flows. Net profit in the 3rd quarter of 2017 grew by 25.84% QoQ, while free cash flows increased by 172.67% QoQ.
  • Energizer share prices are trading with the following discounts compared to its peers:
    – 36% for P/E;
    – 21% for EV/EBITDA;
    – 25% for EV/EBIT.
  • The company continues to demonstrate a high business margin; with a return on equity of 22.03%, return on assets of 11.34%, and a ratio of net profit to revenue of 7.2%.
  • Moderate risks to financial sustainability: the ratio of total debt to EBITDA is a low 2.83, while the ratio of net debt to EBITDA is 1.85.

Expected Return — more than 107% per annum

The return is calculated based on capital protection set to 95% and the price of the underlying asset at expiration equal to 79 USD.  Investment Period Until: 18/05/2018.

This investment opportunity is provided by Alpari.

Alpari International Limited is part of the Alpari group of companies, a recognized global leader in Forex. Alpari has offices in all the major financial centers around the world, including London, New York, Tokyo, Shanghai and Frankfurt. Their monthly turnover exceeds 280 billion USD.

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