Spectrum Brands shares sink on analyst's downgrade
Shares of Spectrum Brands Inc., which has its Rayovac and Remington units based in Madison, dropped to a new 52-week low Thursday after an analyst downgraded the stock, saying the pending sale of its pet business leaves little for investors to cheer about.
Shares fell 43 cents, or 12.7 percent, to $2.95 on Thursday, after hitting a new low for the past year of $2.50 earlier in the day. The stock has traded as high as $6.93 in the past 52 weeks.
BMO Capital Markets analyst Connie Maneaty cut her rating on Spectrum to "Underperform" from "Market Perform." The cut marks the second time Maneaty has lowered her rating on the stock since the company announced in May it would sell its Global Pet segment for $692.5 million in cash plus $222.5 million in debt.
That deal is expected to close in August.
Maneaty said in a note to investors that the company's remaining businesses -- home and garden, global batteries and personal care -- "are sensitive to volatile commodities."
She specifically mentioned the price of zinc, used to make batteries, and the price or urea, a kind of fertilizer.
"Cost inflation looks like it will be the 'new' Spectrum's biggest challenge," she said.
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