5 Best Pet Stocks to Buy Now

4. Spectrum Brands Holdings, Inc. (NYSE:SPB)

Number of Hedge Fund Holders: 31

Based in Middleton, Wisconsin, Spectrum Brands Holdings, Inc. (NYSE:SPB) is a home-essentials company providing specialty pet supplies, lawn and garden and home pest control products, personal insect repellents, shaving and grooming products, personal care products, and small household appliances.

On June 20, Spectrum Brands Holdings, Inc. (NYSE:SPB) announced the closing of the sale of its Hardware and Home Improvement business to ASSA ABLOY for $4.3 billion in cash. The company expects net proceeds of nearly $3.6 billion and expects to use them to reduce its indebtedness, strengthen our operating performance and fund opportunistic M&A activities. In addition, the company plans to return capital to its shareholders, which includes a $1.0 billion share repurchase program.

Heartland Advisors, an investment management company, made the following comments about Spectrum Brands Holdings, Inc. (NYSE:SPB) in its Q3 2023 investor letter:

“After several divestitures in recent years, Spectrum is mostly a pureplay Consumer Staples company focusing on pet care and home and garden supplies, including recognizable brands such as Spectracide lawn and garden products and SmartBone dog treats. Colin McWey Vice President and Portfolio Manager Will Nasgovitz CEO and Portfolio Manager Troy McGlone Vice President and Portfolio Manager SPB is in the process of transforming itself from an acquisition-oriented holding company into an integrated operating company with sharper focus. As part of that process, the company recently divested its Hardware and Home Improvement segment, selling it to the Swedish conglomerate Assa Abloy for $4.3 billion in cash. [. . .] This gives SPB ample capacity to repurchase shares at a steep discount to intrinsic value while setting the stage for operational improvements. Meanwhile, the stock trades at just 7X next year’s EBITDA and 5X to 5.5X normalized EBITDA.”