Energizer Bunny for Navy's Nukes
Cramer just won’t give up on these new-tech companies he’s been recommending. Aside of praising them for bringing innovation to some of the most important parts of the economy, he thinks the stocks are winners.
The latest name in the new-tech portfolio is Enersys, the largest industrial-battery maker in the world. (Not to be confused with Enersis, the Chilean utility.) The company’s proprietary “thin pure plate lead” technology takes old-fashioned lead acid batteries and makes them run longer with less maintenance. And they’re smaller, too.
Enersys struck a contract with the U.S. Navy to retrofit its nuclear submarines with these TPPLs, and the demand doesn’t stop there. Apparently, the company has its factory running seven days a week and that’s still not enough to fill all the orders. Plans are underway for an expansion. And as new applications for the technology are found, the 10% of sales TPPL accounts for should only get bigger.
As for the wider view on Enersys, about half of sales come from forklifts, which is a play on the global logistics boom as well as demand for mining and railroad equipment. The company’s reserve-power business is a hit with telecom firms. The build out in that sector is no secret, which again puts Enersys in a sector sweet spot. Add to this the 60% of sales that come from outside North America, and there are plenty of reasons to be bullish on ENS.
Cramer probably wouldn’t have recommended a stock that was up so much after pre-announcing an earnings beat and increased guidance. But a downgrade Wednesday by Merriman dropped the stock about 8%, giving investors the perfect opportunity to get into Enersys.
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