The Daily Herald from Arlington Heights, Illinois on March 9, 2008 · Page 139
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The Daily Herald from Arlington Heights, Illinois · Page 139

Arlington Heights, Illinois
Issue Date:
Sunday, March 9, 2008
Page 139
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SUNDAY, MARCH 9, 2008 DAILY iiF.UAU) SKCTION:! PAGE 5 THE WALL STREET JOURNAL SU BARRON'S INSIGHT | By Christopher C. Williams Energizer Likely to Bounce Back With Playtex A t its recent price around $90 a share, Energizer Holdings (ENR) is off nearly 20% this year. But the company's recent acquisition of Playtex Products, a weaker dollar and accelerating sales could get the Bunny hopping again soon. Indeed, as a result of the stock's selloff—which was spurred by concerns about the $1.9 billion purchase of Playtex in October, the economy's woes and competition in the battery business—Energizer now may be one of the most compelling buys in the consumer-products sector. Energizer's shares "look appealing at these levels," says Energizer Holdings <ENR) 52-week stock price $130120 2007 '08 Source: WSJ Market Data Group Bob Goldsborough, vice president of research at Ariel Capital Management, which holds more than three million of the company's 57.4 million shares. Mr. Goldsborough sees potential for a 34% rise in Energizer's share price to $120, or 18 times lu's earnings estimate of $6.64 for the fiscal year that will end in September. Wall Street analysts expect the company to earn $6 in fiscal 2008 and $7.52 in 2009 as Playtex is fully integrated, and see profit growing 13% to 15% long term. In fiscal 2007, Energizer earned $312 million, or $5.35 a share, on revenue of $3.4 billion. ASK DOW JONES By Tom Herman Q , I read that couples who i make $75,000 or $150,000 may not qualify for the economic-stimulus payment. Which one is it? J.M., Concord, Ohio A , Neither. • Those numbers you mention aren't the upper income limits. They're what congressional staffers refer to as "phase-out levels." That means the size of your economic-stimulus payment from the Treasury Department begins to phase out, or disappear, once your adjusted gross income exceeds a certain level. The level for married couples filing jointly is $150,000. For singles, it's $75,000. Adjusted gross income refers to your income after you've made certain adjustments. For example, adjusted gross income comes after deducting such items as alimony payments and the self-employed health-insurance deduction. The phase-out formula works like this: Your economic-stimulus payment drops by 5% of the income above the threshold-for example, $50 for each $1,000 over the amount. Here are a few examples. Suppose you and your husband file jointly and have no kids. Your adjusted gross income for 2007 was $150,000. In that case, you typically would qualify for the full economic-stimulus payment of $1,200. But if your income for last year was $174,000, you typically wouldn't be eligible for any payment. Why? That's because you were $24,000 over the phase-out threshold ($174,000 minus $150,000). Multiply $24,000 by 5%, and the answer is $1,200. Subtract that from the stimulus payment amount of $1,200, and you get zero. If you're single, made $70,000 last year and have no qualifying kids, you typically would be eligible for a $600 economic-stimulus payment. If you made $80,000, you typically would get $350. (Take the individual rebate of $600 and subtract the phase-out reduction of $250). For more details, see the IRS Web site ( Spun out of Ralston-Purina in 2000, Energizer generated 71% of sales in its latest fiscal year from batteries and lighting products, with Schick razors, blades and other shaving items contributing the remainder. Energizer is No. 2 in the battery and shaving markets behind Procter & Gamble. The Playtex acquisition will lessen Energizer's dependence on these highly competitive businesses by adding house- Send questions on finances, investments or taxes to: askdpwjones. and include your name, address and a daytime telephone number. Questions may be edited; we regret that we cannot answer every letter. hold brands and products, such as Playtex tampons, Wet Ones wipes and Banana Boat sunscreen, to the corporate fold. After the Playtex deal, Energizer restructured its operations, housing the battery and flashlight products in the new Household Products unit, which is expected to contribute about 60% of future sales. Personal Care, including Playtex and shaving supplies, should chip in 40%. Because Energizer and Playtex share similar customers and distribution channels, the company is expected to wring significant synergies from the union, and help boost earnings. Energizer expects to realize $70 million of cost savings from integrating Playtex. Mario Gabelli, chairman of Gamco Investors, owner of about 1.7 million Energizer shares, lauds the Playtex purchase. "You have a company whose management is making the right acquisitions," he says of Energizer. "It's a terrific consumer-growth story." StatoftheWeek RECORD PRICES: Oil prices, already at record levels, last week closed above the inflation-adjusted high from 1980. Gold is also at nominal (that is, nonadjusted) highs, but is far below its 1980 inflation-adjusted peak. Crude Oil $120 WTI crude oil, posted price monthly 100-.. Oil futures 20-. Or- Nominal 1979 '80 '81 '82 2005 '06 '07 Gold Futures $2,500 1978' '79 ' '80 ''81 'ZOO?' '06 '07 Sources: WSJ Market Data Group, New York Mercantile Exchange, Oil & Gas Journal via the St. Louis Federal Reserve Is your IRA working hard enough? Every day, thousands make the switch to a Fidelity IRA. Fidelity is America's # 1 IRA choice. Everyone has their reason for switching to a Fidelity IRA. Maybe it's the quality of the investment choices we offer, or the free guidance to help you choose. Let us help you find your own reason to switch. It's easy — talk with one of our Rollover Specialists today. Open your Fidelity IRA today. • Transfer. 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