The Stock Masters submit: Spectrum Brands (SPC) formerly known as Rayovac, has had rough year. They've stumbled all the way from $30 down to the current share price of $7.50.
The question is this: Were they punished fairly, or unfairly?
In the last year, they have had Federal Investigations on their financials. They've issued lower guidance multiple times, and gross earnings were down 90% in there 2006 Q2 earnings release. This, combined with downgrade after downgrade, has led to the 71% drop in share price in the last year. And let me tell you something, Wall Street despises this company.
However, I think Wall Street may come around soon. The Federal inquiry on there financials was dropped on August 3rd. Fundamentals are starting to improve as management cuts costs. An integration of two recent acquisitions, Tetra Holdings & United Industries could contribute to savings of $100 million annualy for the company. Revenues are increasing at a steady pace.
And they just announced today that they have signed Brett Favre as their company spokesman, which could give them the brand recognition and catalyst they need to put the last year behind them.
I think 7.50 is or is close to a bottom for Spectrum Brands, the company is stabilizing - everyone is going to start realizing this and upgrades will come rolling in. I wouldn't be surprised to see it back above 10 in the next year.
SPC 1-yr chart:
Article written by Eric Cheshier.