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How much a stock's price changes over time is important for most investors, since price performance can both impact your investment portfolio and help you compare investment results across sectors and industries.
FOMO, or the fear of missing out, also plays a role in investing, particularly with tech giants and popular consumer-facing stocks.
What if you'd invested in Central Garden (CENT) ten years ago? It may not have been easy to hold on to CENT for all that time, but if you did, how much would your investment be worth today?
Central Garden's Business In-Depth
With that in mind, let's take a look at Central Garden's main business drivers.
Committed to product innovation, Central Garden & Pet Co. is looking forward to strengthening its position as one of the leading companies in the U.S. pet supplies and lawn and garden supplies space. Unique packaging, point-of-sale displays, logistic capabilities and a high level of customer service are some of its key growth catalysts.
With such upsides, it boasts a wide repertoire of clients, including PetSmart, PETCO, Walmart, Home Depot and Lowe’s. Further, the company actively engages in buyout activities to gain market share. In this regard, it acquired four new businesses in the last three years, including Arden and C&S.
Moving on, the company offers products to mass merchants, home improvement centers, lawn and garden nurseries, grocery stores, specialty pet stores, veterinarians’ municipalities, and other individual animal buyers. It also produces both branded products and private-label products along with distributing third-party brands. With such a wide array of products in its portfolio, Central Garden & Pet operates under two segments as discussed below.
Pet Segment (58% of Fiscal 2020 total sales): This segment offers food and accessories for dogs, cats, birds, small animals, fishes, horses and livestock under brands, such as Adams, Aqueon, Avoderm, C&S Products, Cadet, Farnam, Four Paws, Kaytee, K&H Pet Products, Nylabone, Pinnacle, TFH Publiciations, Zilla, Altosid, Comfort Zone, Coralife, Interpet, Pet Select and Zodiac.
Garden Segment (42% of Fiscal 2020 total sales): This segment offers both proprietary and nonproprietary grass seeds, herbicides, insecticides, pesticides, decorative outdoor lifestyle and lighting products. The segment markets its products under brands such as AMDRO, Arden Companies, Ironite, Pennington, Sevin, Lilly Miller, Over-N-Out, Smart Seed and The Rebels.
Anyone can invest, but building a successful investment portfolio takes a combination of a few things: research, patience, and a little bit of risk. So, if you had invested in Central Garden a decade ago, you're probably feeling pretty good about your investment today.
According to our calculations, a $1000 investment made in April 2011 would be worth $6,206.90, or a 520.69% gain, as of April 15, 2021. Investors should keep in mind that this return excludes dividends but includes price appreciation.
Compare this to the S&P 500's rally of 213.78% and gold's return of 12.18% over the same time frame.
Analysts are anticipating more upside for CENT.
Shares of Central Garden & Pet have risen and outpaced the industry year to date. The company has been taking steps to strengthen its position in the pet supplies and lawn and garden supplies space. It has been developing new products, advancing digital capabilities, optimizing supply chain, and focusing on marketing activities. Impressively, these endeavors aided the company to continue with its stellar performance in first-quarter fiscal 2021. Looking into 2021, management indicated higher investments related to capacity expansion, brand building and e-commerce, and increases in labor and freight cost as well as key commodity prices. Further, the company anticipates second-half headwinds associated with lapping almost ideal weather for the gardening season and the COVID-19 tailwinds in 2020. These are likely to weigh on fiscal 2021 earnings.
The stock has jumped 7.05% over the past four weeks. Additionally, no earnings estimate has gone lower in the past two months, compared to 1 higher, for fiscal 2021; the consensus estimate has moved up as well.
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