Best
Please note this is only an opinion and not financial advice. Direct stock investing is subject to business and market risks. Therefore, it’s highly recommended to do proper risk management and your own due diligence before investing.
Growth Stock Analysis As of 16 September 2023
NASDAQ: CENT (Central Garden & Pet Company)
- Central Garden & Pet Co understands that home is central to life and has nurtured happy and healthy homes for over forty years. Central is on a mission to lead the future of the pet and garden industries.
- CENT’s innovative and trusted products are dedicated to helping lawns grow greener, gardens bloom bigger, pets live healthier and communities grow stronger.
- With over 7,000 employees across North America, Europe, and China, we are committed to working together to create opportunity, a culture of inclusivity & belonging, and a great place.
- The pet business is focused on pet supplies and treats for dogs, cats, birds, fish, horses, and livestock. Kaytee, C&S, Aqueon, Nylabone, and Four Paws are among its leading pet supply brands.
- Mr. Brown founded the company and has extensive management and leadership experience and a deep knowledge of the lawn & garden and pet supplies industries and the financial and operational issues faced by the Company.
- Central Garden & Pet makes branded and private-label products in addition to distributing third-party brands. Since the company isn’t a retailer, it doesn’t compete with the likes of PetSmart, PETCO, and Chewy.
- Top Shareholdings of Central Garden & Pet Company Common Stock (CENT):
| Holder | Shares | Date Reported | % Out | Value |
|---|---|---|---|---|
| Blackrock Inc. | 1,616,719 | Jun 29, 2023 | 14.59% | 75,856,452 |
| Vanguard Group Inc | 1,496,426 | Jun 29, 2023 | 13.51% | 70,212,305 |
| Allspring Global Investments Holdings, LLC | 964,935 | Jun 29, 2023 | 8.71% | 45,274,748 |
| Dimensional Fund Advisors LP | 774,997 | Jun 29, 2023 | 7.00% | 36,362,857 |
| Morgan Stanley | 674,245 | Jun 29, 2023 | 6.09% | 31,635,574 |
| Geode Capital Management, LLC | 493,798 | Jun 29, 2023 | 4.46% | 23,169,001 |
| Allianz Asset Management GmbH | 481,455 | Jun 29, 2023 | 4.35% | 22,589,867 |
| State Street Corporation | 374,396 | Jun 29, 2023 | 3.38% | 17,566,659 |
| Renaissance Technologies, LLC | 233,711 | Jun 29, 2023 | 2.11% | 10,965,719 |
| Northern Trust Corporation | 185,376 | Jun 29, 2023 | 1.67% | 8,697,841 |
What we think are PROs of Central Garden & Pet Company Common Stock (CENT):
- Access valuable intelligence regarding Central Garden & Pet Company’s mergers, acquisitions, strategic partnerships, fundraising activities, involvement with private equity, and its financial and legal advisors.
- The company boasts a portfolio of more than sixty-five brands including Pennington, Nylabone, Kaytee, Amdro, and Aqueon.
- The largest distributor of lawn and garden and pet supplies in the United States, Central Garden & Pet Company stocks approximately 45,000 products made by 1,000 manufacturers and distributes the merchandise to high-volume retailers such as Kmart, Wal-Mart, and Costco.
- Central Garden & Pet’s e-commerce sales surged by 192% for pets and 37% for gardens last year. Online sales now make up 20% of the pet business but only 3% of the garden business, suggesting substantial growth potential in gardening.
- Cash flow from operations is trending in the right direction and the company is sitting on about a half billion in cash for acquisitions, product expansion, and international growth opportunities.
What we think the RISKs are in Central Garden & Pet Company Common Stock (CENT):
- The garden segment is particularly weather-dependent, and adverse weather conditions can impact sales and inventory management.
- Growing awareness of environmental issues can affect consumer choices, requiring businesses to adopt sustainable practices.
- Given the nature of the products in these industries, there’s a risk of product recalls or liability claims.
- Company has high debt obligation, Debt only becomes a real problem when a company can’t easily pay it off, either by raising capital or with its own cash flow.
FUNDAMENTALS:
Market Cap. = 2.32B
Beta = 0.71
P/E Ratio = 18.43
52 wk Range = 35.60 – 48.4
Revenue = 3.27B
EPS = 2.30
D/E = 1.36
- Technicals:
– Trendline breakout and again bullish momentum after a small pullback which shows more strength in price.
– Taking support at the past support zone. - – Reverse from the 200 EMA levels which is also a bullish sign.
– High volume in last week’s candle.
– RSI is very bullish and trading around 65 levels.
Entry: Above 48
Target: 56 & 72
Stoploss: 40
Our Final Thought:
Central Garden & Pet Company is not a large company in terms of market capitalization but this is one of the top companies when it comes to PETS and gardening. Its total revenue is more than the current market capitalization which is a good sign but there is also a high debt on the company’s books of account. We are expecting good growth in terms of stock price because the company is focusing on decreasing its debt obligation every quarter. Also on charts, there is a good breakout of the trendline and after an expected pullback it is now preparing for the bullish rally with high trading volume in which the price can move up to the previous 52-week high.
Please note this is only an opinion and not financial advice. Direct stock investing is subject to business and market risks. Therefore, it’s highly recommended to do proper risk management and your own due diligence before investing.
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