Central Garden & Pet Company (CENT) research, news, and more from GeoInvesting

Company description

Wed, 30 Jul 2008 04:00:00 GMT

Central Garden & Pet Company is a leading innovator, marketer and producer of quality branded products for the lawn & garden and pet supplies markets. Committed to new product innovation, ITS products are sold to specialty independent and mass retailers in the following categories: In Lawn & Garden: Grass seed including the brands Pennington and The Rebels; wild bird feed and the brands Pennington and Kaytee; weed and insect control and the brands AMDRO, Sevin, Ironite and Over 'N Out and; decorative outdoor patio products and the brands Norcal, New England Pottery and Matthews Four Seasons. The Company also provide a host of other regional and application-specific garden brands and supplies. It also provide a host of other application-specific Pet brands and supplies.

Research

Thu, 04 Aug 2016 15:49:08 GMT

Locked In CENT Gains

Yesterday via premium tweet we stated we were locking in gains in $CENT ($26.09) from our momentum trade from June 22, 2016. The stock was trading at $22.58 at the time of our alert.

Research

Wed, 03 Aug 2016 14:41:26 GMT

CENT ($23.92) reported Q3 2016 results:

Sales of $514.5 million vs $459.4 million in the prior year and ahead of analyst estimates of $490.9 million
Non-GAAP EPS of $0.48 vs $0.38 in the prior year and ahead of analyst estimates of $0.43
Full year EPS guidance of $1.18 ahead of analyst estimates of $1.12

Quotes from management:

"Going forward, we will be even more aggressive in executing on the initiatives we believe are important to the Company's long-term success. These include continuing to focus on our customers' needs, increasing our innovation output and success rate, and lowering our costs to invest in growth. While there is a near-term cost to some of these actions, we believe we will have the financial flexibility to fund incremental investment while continuing to drive meaningful sales and profit growth."

We initiated our long position in CENT on June 22, 2016 when the stock was trading at $22.58. See our original note on the company here.

Research

Thu, 23 Jun 2016 15:12:09 GMT

Initiated Positions In CENT and SQBG

Yesterday, via premium tweet we stated that on the heels of our morning email we nibbled at shares of $CENT ($22.34) and $SQBG ($8.15). In yesterday’s email we stated we were watching both names for possible trade opportunities/entry points. We plan on interviewing both companies. One thing that caught our eye is that insiders have been buying SQBG (46,829 shares) since mid May, even as the stock rises

See yesterday’s note here.

Research

Wed, 22 Jun 2016 15:17:20 GMT

Watching For Momentum Trades In CENT and SQBG

We are watching $CENT ($22.58) and $SQBG ($8.49) for possible trade opportunities and entry points.

In our June 16 email we stated we were beginning to look at CENT based on SunTrust’s upgrade to a “Buy” with a $30 price target.

Our preliminary look at CENT shows the Company has impressively grown its EPS since 2013 ($0.12 to $0.74 in 2015). Analysts have EPS growing to $1.10 and $1.26 in fiscal 2016 and 2017 respectively (Year ends September). At $1.8 billion in projected annualized revenue, CENT is one of those rare breeds in the micro-cap space that we call “Big-Cap Micro,” referring to a microcap company that generates Big Cap revenue. At a time when microcaps have not been receiving much love, these type of microcaps can gain some respect. Also reference the share performance of one of our past top performing picks, $PATK (nearing sales of $1 billion). The stock has risen over 1400% since our 2011 GeoBargain On the Radar coding. Although, we sold the stock early after the stock rose 285%.

The markets that CENT targets, home & garden and pet supplies, have strong tailwinds that we would like to understand a bit more after talking with management.

SQBG, an apparel and home goods provider, which we highlighted on May 17, 2016 has received a $16 price target at Brean Capital yesterday. Shares are up nicely since our reasons for tracking note. Unfortunately, we never pulled the trigger. SQBG is selling at a modest P/E of 12.3 on fiscal 2017 EPS estimates of $0.69. Our biggest caveat was that we needed to diagnose the company's exposure to brick and mortar retailers.

We will alert you if we make a move in either name.