This Day On The Street
Continue to site
ADVERTISEMENT
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here

Upgrade Boosts Central Garden & Pet Shares

CHIP CUTTER

NEW YORK (AP) ¿ Shares of Central Garden & Pet Co. advanced Wednesday after an analyst upgraded the stock to "Buy" from "Neutral," noting that the company appears to have "finally turned the corner" in overcoming high commodity costs and challenges related to weather.

SunTrust Robinson Humphrey analyst William Chappell hiked his rating for the garden and pet products company, citing lower grain costs for bird seed products and fewer droughts that have hampered the company's grass seed and pesticide line in recent years.

Bird seed primarily consists of grain. But, as demand for ethanol pushed grain commodity prices higher from 2006 to 2008, Central couldn't pass off price increases fast enough to keep up with rising costs, he wrote.

Now, "it appears that the worst is behind the company in terms of commodity headwinds," Chappell wrote.

Central's garden business should also benefit from a lack of severe droughts in the southeastern and southwestern United States. In the past few years, water shortages in those regions led officials to impose widespread watering restrictions, which curtailed gardening activities.

"Why plant grass seed if you can't water it?" Chappell wrote.

The company could also see a boost from the growing "staycation" trend, in which consumers spend more time and money around the home, and from management's efforts to cut costs, he wrote.

Walnut Creek, Calif.-based Central shares rose 85 cents, or 8.8 percent, to $10.51 in afternoon trading.

Copyright 2009 Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

Check Out Our Best Services for Investors

Action Alerts PLUS

Portfolio Manager Jim Cramer and Director of Research Jack Mohr reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

David Peltier uncovers low dollar stocks with serious upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
14-Days Free
Only $9.95
14-Days Free
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!
SYM TRADE IT LAST %CHG
CENTA $10.30 0.00%
AAPL $130.28 0.00%
FB $81.53 0.00%
GOOG $565.06 0.00%
TSLA $218.42 0.00%

Markets

DOW 18,080.14 +21.45 0.12%
S&P 500 2,117.69 +4.76 0.23%
NASDAQ 5,092.0850 +36.0220 0.71%

Partners Compare Online Brokers

Free Reports

Top Rated Stocks Top Rated Funds Top Rated ETFs