ENS - Embedded Expectations Analysis - 2020 08 24
EnerSys (ENS:USA) currently trades below corporate averages relative to UAFRS-based (Uniform) earnings, with a 17.4x Uniform P/E. At these levels, the market is pricing in bearish expectations for the firm, and management may have concerns about gross margins, demand for ODYSSEY brand, and the Richmond plant fireSpecifically, management may lack confidence in their ability to sustain their adjusted earnings per diluted share, meet their June expectations, and improve adjusted consolidated earnings. Furthermore, they may have concerns about their OEM customers' mixed levels of production, and may be exaggerating the demand for the ODYSSEY brand and the performance of the home improvement sector. Management may also lack confidence in their ability to improve energy systems revenue and gross margins, and fully recover their business interruption claim from the Richmond Fire. Management may also lack confidence in the performance of their Class 8 (over the road big rigs) segment, and may be exaggerating the positive impact of Dish's creation of their 5G network on their business and their ability to withstand the impact of the pandemic
EnerSys is a manufacturer, marketer and distributor of industrial batteries. The company also manufactures, markets and distributes products such as battery chargers, power equipment, battery accessories, and outdoor cabinet enclosures. The company's product lines are: reserve power products, which are used for backup power for the continuous operation of critical applications in telecommunications systems, uninterruptible power systems applications for computer and computer-controlled systems, and other specialty power applications; and motive power products, which are used to provide power for electric industrial forklifts used in manufacturing, warehousing and other material handling applications.
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- GAAP and IFRS have failed to provide rules for reliable financial statement reporting
- Stock analyst recommendations are not grounded in disciplined financial analysis
- Credit agencies have been set up to grossly fail in their responsibilities to investors and the public markets
- Utter lack of willingness of major research firms to employ the the most advanced forensic analysis available
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