Exide's troubles roil the acid-battery space: Look out for a buying opportunity in Johnson Controls?
04/04/2013 5:03 pm EST
Exide has been battling to win back market share in the battery replacement market—its share of the automotive replacement market rose to 32% in the December quarter from 27%. (The company has a 69% share of the original equipment market, down from a high of 74%.) But those market share gains have come at the cost of profit margins. Operating margins fell by 1.7 percentage points in the quarter from the year earlier period to 11.3%. After the quarter’s results, analysts cut their estimates for operating margins in the fiscal year that ends in March 2014 by 2 to 3 percentage points.
Exide supplier Polypore International (PPL) fell 3.1% on the news. Exide competitor Johnson Controls (JCI) was down 1.3%. (Johnson Controls is a member of my Jubak Picks 50 long-term portfolio http://jubakpicks.com// . I’ll have an update on that portfolio next week, by the way.)
Full disclosure: I don’t own shares of any of the companies mentioned in this post in my personal portfolio. When in 2010 I started the mutual fund I manage, Jubak Global Equity Fund http://jubakfund.com/, I liquidated all my individual stock holdings and put the money into the fund. The fund may or may not now own positions in any stock mentioned in this post. The fund did own shares of Johnson Controls as of the end of December. For a full list of the stocks in the fund as of the end of December see the fund’s portfolio at http://jubakfund.com/about-the-fund/holdings/
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