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Company: Energizer Holdings (ENR)
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  Higher Zinc Prices

Higher zinc prices - Zinc is a key ingredient in the manufacture of Energizer's batteries. Prices for the mineral have more than doubled since 2005, putting pressure on the company's margins. So far Energizer has been able to maintain profitability by raising its prices. If Zinc prices continue to rise, this may not be a viable option in the future since higher prices may depress demand.

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  "Diversification, while normally a good thing, has its risks"

Diversification, while normally a good thing, has its risks. With the acquisition of Playtech, Energizer has entered into the feminine hygiene arena in a big way. There is still substantial integration risk, and of course, one has to wonder if a battery company is up to the challenge of successfully growing a feminine hygiene business.

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  Diversification, while normally a good thing, has its risks

Diversification, while normally a good thing, has its risks. With the acquisition of Playtech, Energizer has entered into the feminine hygiene arena in a big way. There is still substantial integration risk, and of course, one has to wonder if a battery company is up to the challenge of successfully growing a feminine hygiene business.

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  Reliance on Wal-Mart

Wal-Mart is Energizer's largest customer, accounting for 20% of the firms' combined sales. Being so dependent on one customer, can be risky, particular if Wal-Mart should feel the need to renegotiate or switch vendors.

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