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3 Reasons Why You Should Invest in Spectrum Brands Right Now
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Spectrum Brands Holdings, Inc. (SPB - Free Report) is an appropriate investment option as its shares have outperformed the industry and the overall Consumer Discretionary sector in the past three months. This Zacks Rank #1 (Strong Buy) stock has rallied approximately 47.8% compared with the sector’s growth of 19% and against the industry’s decline of 10%.
That said, let’s delve into the factors that make Spectrum Brands a promising bet.
GPIP Plan to Aid Growth
Spectrum Brands is progressing well with its Global Productivity Improvement Plan (GPIP), which is expected to generate at least $100 million in run-rate savings annually. The company’s third-quarter fiscal 2020 results reflected gains from the plan. This strategic initiative aims at improving the company’s operating efficiency and effectiveness, while focusing on consumer insights and growth-enabling functions, including technology, marketing, and research and development. Notably, the majority of these savings are expected to be reinvested in growth initiatives and consumer insights, R&D, and marketing across allof the company’s businesses. This plan will also enable the company to generate value creation and sustainable growth in the long term.
Strength in Global Pet CareBodes Well
The company has been witnessing a solid performance in Global Pet Care for a while now. Notably, sales in the segment improved 8.9%, with organic sales growth of 8.3% on high-single-digit and double-digit growth in aquatic and companion animal categories, respectively, during the fiscal third quarter. Also, strong e-commerce sales along with a spike in demand for aquatics and reptile kits and equipment contributed to segment growth. In sync with its Global Productivity Improvement Plan, the pet business is on track with exiting non-core assets and activities to focus on core brands. Additionally, the company is on track with its plans to tap into the aquatics and reptile space. In this context, Spectrum Brands is progressing well with the integration of its newly acquired Omega Sea, which is now part of its Global Pet Care portfolio of aquatic brands.
Impressive Q3 Results
Despite adverse COVID-19 impacts, including supply-chain disruptions, the company posted better-than-expected results for third-quarter fiscal 2020, driven by solid demand for its products throughout the quarter. The bottom line gained from a fall in shares outstanding, favorable pricing and productivity, which more than offset supply-chain disruptions in the Hardware & Home Improvement segment. Apart from these, majority of its segments delivered sturdy sales growth. Furthermore, management anticipates shipments and factory output to improve in the fiscal fourth quarter.
Wrapping Up
All said, we believe the company’s plans will help it stay afloat amid the ongoing coronavirus pandemic and sustain the stellar show.
Crocs (CROX - Free Report) has a long-term earnings growth rate of 15% and a Zacks Rank #1
Prestige Consumer Healthcare (PBH - Free Report) has an expected long-term earnings growth rate of 4%. Also, the company has a Zacks Rank #2 (Buy).
Zacks’ Single Best Pick to Double
From thousands of stocks, 5 Zacks experts each picked their favorite to gain +100% or more in months to come. From those 5, Zacks Director of Research, SherazMian hand-picks one to have the most explosive upside of all.
With users in 180 countries and soaring revenues, it’s set to thrive on remote working long after the pandemic ends. No wonder it recently offered a stunning $600 million stock buy-back plan.
The sky’s the limit for this emerging tech giant. And the earlier you get in, the greater your potential gain.
Image: Bigstock
3 Reasons Why You Should Invest in Spectrum Brands Right Now
Spectrum Brands Holdings, Inc. (SPB - Free Report) is an appropriate investment option as its shares have outperformed the industry and the overall Consumer Discretionary sector in the past three months. This Zacks Rank #1 (Strong Buy) stock has rallied approximately 47.8% compared with the sector’s growth of 19% and against the industry’s decline of 10%.
That said, let’s delve into the factors that make Spectrum Brands a promising bet.
GPIP Plan to Aid Growth
Spectrum Brands is progressing well with its Global Productivity Improvement Plan (GPIP), which is expected to generate at least $100 million in run-rate savings annually. The company’s third-quarter fiscal 2020 results reflected gains from the plan. This strategic initiative aims at improving the company’s operating efficiency and effectiveness, while focusing on consumer insights and growth-enabling functions, including technology, marketing, and research and development. Notably, the majority of these savings are expected to be reinvested in growth initiatives and consumer insights, R&D, and marketing across allof the company’s businesses. This plan will also enable the company to generate value creation and sustainable growth in the long term.
Strength in Global Pet CareBodes Well
The company has been witnessing a solid performance in Global Pet Care for a while now. Notably, sales in the segment improved 8.9%, with organic sales growth of 8.3% on high-single-digit and double-digit growth in aquatic and companion animal categories, respectively, during the fiscal third quarter. Also, strong e-commerce sales along with a spike in demand for aquatics and reptile kits and equipment contributed to segment growth. In sync with its Global Productivity Improvement Plan, the pet business is on track with exiting non-core assets and activities to focus on core brands. Additionally, the company is on track with its plans to tap into the aquatics and reptile space. In this context, Spectrum Brands is progressing well with the integration of its newly acquired Omega Sea, which is now part of its Global Pet Care portfolio of aquatic brands.
Impressive Q3 Results
Despite adverse COVID-19 impacts, including supply-chain disruptions, the company posted better-than-expected results for third-quarter fiscal 2020, driven by solid demand for its products throughout the quarter. The bottom line gained from a fall in shares outstanding, favorable pricing and productivity, which more than offset supply-chain disruptions in the Hardware & Home Improvement segment. Apart from these, majority of its segments delivered sturdy sales growth. Furthermore, management anticipates shipments and factory output to improve in the fiscal fourth quarter.
Wrapping Up
All said, we believe the company’s plans will help it stay afloat amid the ongoing coronavirus pandemic and sustain the stellar show.
Other Stocks to Watch
Whirlpool Corporation (WHR - Free Report) has a long-term earnings growth rate of 16.7%. Currently, it carries a Zacks Rank #1. You can see the complete list of today’s Zacks #1 Rank stocks here.
Crocs (CROX - Free Report) has a long-term earnings growth rate of 15% and a Zacks Rank #1
Prestige Consumer Healthcare (PBH - Free Report) has an expected long-term earnings growth rate of 4%. Also, the company has a Zacks Rank #2 (Buy).
Zacks’ Single Best Pick to Double
From thousands of stocks, 5 Zacks experts each picked their favorite to gain +100% or more in months to come. From those 5, Zacks Director of Research, SherazMian hand-picks one to have the most explosive upside of all.
With users in 180 countries and soaring revenues, it’s set to thrive on remote working long after the pandemic ends. No wonder it recently offered a stunning $600 million stock buy-back plan.
The sky’s the limit for this emerging tech giant. And the earlier you get in, the greater your potential gain.
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