Here's Why Central Garden & Pet (CENT) Stock Looks Promising
Central Garden & Pet Company CENT looks well poised for growth, thanks to its robust business strategies. The company has been strengthening its position in the pet supplies and lawn and garden supplies space via prudent acquisitions. It has also been developing products, advancing digital capabilities, optimizing supply chain, and focusing on marketing activities. Impressively, these endeavors have been aiding the company’s performance. The company delivered its fifth straight sales and earnings beat in first-quarter fiscal 2021.
Apparently, shares of this Zacks Rank #1 (Strong Buy) company are witnessing momentum. Its shares have surged 79.3% over the course of a year and outpaced the industry’s mere gain of 0.6%. Additionally, analysts are looking optimistic about the company. We note that the Zacks Consensus Estimate for earnings has moved up 5.2% to $1.01 for the second quarter and 10% to $2.31 for fiscal 2021 over the past 30 days. You can see the complete list of today’s Zacks #1 Rank stocks here.
Let’s Analyze Further
In order to reinforce its position, Central Garden & Pet has been a disciplined buyer in the garden and pet categories. In fact, acquisitions form an important part of the company’s strategy. Markedly, the company has expanded its business via more than 50 acquisitions since 1992. Through these buyouts, management seeks to enhance the company’s manufacturing capabilities, operating synergies, distribution network, economies of scale and market advantages. Certainly, these acquisitions have been enhancing Central Garden & Pet’s portfolio and customer base, and in turn fueling the top line.
The company’s recent acquisitions include the buyout of Green Garden Products (Green Garden) and Hopewell Nursery. With the addition of Green Garden to Central Garden & Pet’s portfolio, the company looks to expand the business, leverage merchandising, engage in brand building and enhance digital capabilities. Through the Hopewell Nursery buyout, which follows the addition of Bell Nursery to the company’s portfolio, the company looks to strengthen its position in the live goods space with high-quality offerings. It has also acquired C&S Products, which has been complementing its existing wild bird feed business.
Speaking of its digital initiatives, the acquisition of DoMyOwn.com has been advancing the company’s digital capabilities to deliver strong omni-channel performance. DoMyOwn.com is a fast-growing online retailer of professional-grade control products in the United States. The deal adds best-in-class e-commerce fulfillment platform and digital capabilities to the company’s portfolio, thus helping Central Garden & Pet cater to the rising e-commerce demand.
Meanwhile, the company seeks to develop differentiated products, improve sales capacity, respond to channel shifts and become more cost-effective. Unique packaging, point-of-sale displays, logistic capabilities and a high level of customer service are also key catalysts. Driven by these strengths, the company’s both garden and pet businesses have been performing well. That said, we believe all the aforementioned initiatives will keep yielding favorable results. A VGM Score of B further speaks of the company’s inherent potential.
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