Central Garden & Pet Co. (NASDAQ:CENT)

CAPS Rating: 5 out of 5

The Company is an innovator, marketer and producer of branded products for the pet and lawn and garden supplies markets.


Player Avatar mrindependent (35.94) Submitted: 9/3/2009 1:30:31 PM : Underperform Start Price: $11.90 CENT Score: +9.16

Central Garden and Pet is selling near its 52 week high. The share price is 1.5 times book value, which is significantly above typical p/bv ratios that prevailed over the last 10 years. Ignoring its gigantic asset impairment last year, its returns on equity have average 8% or less. The company recently filed a shelf registration statement that allows it to issue new shares from time to time in unspecified amounts at unspecified prices. I expect the company to immediately sell into this richly valued market and this increase in supply will likely cause a price drop.

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