Is Spectrum Brands Still a Buy for Callodine Capital?

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Last week, I found myself in a pet store, staring at a bag of IAMS dog food. The price tag made me gasp-not because it was high, but because it wasn’t. “They’re practically giving it away,” I muttered to the clerk, who shrugged and said, “Guess nobody likes dogs anymore?” A joke, sure, but maybe Callodine Capital disagrees. The fund just poured another $18 million into Spectrum Brands, the parent company of IAMS, as if betting that humanity’s affection for pets (and small appliances) is more resilient than the market believes.

The Buy That Keeps On Buying

On November 13th, Callodine Capital Management disclosed an addition of 360,898 shares to its existing stake in Spectrum Brands. This isn’t some impulsive Tinder date of an investment-it’s a slow-cooked marriage. Since 2022, the fund has turned SPB into its largest holding, now worth $90 million. That’s 7.89% of their AUM, which feels like bringing a date to Thanksgiving dinner and then, against all odds, staying for dessert.

Meanwhile, Spectrum’s share price has fallen faster than my confidence during a family Zoom call. At $57.44, it’s down 38% year-over-year, a performance so dismal it makes the S&P 500 look like a Broadway understudy who just got handed the lead role. Yet Callodine keeps buying, as if convinced the market is misreading the script.

The Bargain Bin With Benefits

Let’s talk numbers, because even if math isn’t your thing, desperation discounts usually are. Spectrum’s price-to-sales ratio now sits at 0.5-the lowest since the 2020 crash. For context, that’s cheaper than a pair of Black & Decker drill bits at a garage sale. The stock trades at 12x forward earnings, and the dividend yield? A cheery 3.3%, which isn’t enough to retire on but could buy you a nice bottle of wine after a particularly brutal earnings call.

The company’s strategy feels like a game of Jenga: they sold their hardware business in 2023 for $4.1 billion, used the proceeds to buy back nearly half their shares, and now they’re eyeing another divestiture in home and personal goods. It’s either a masterclass in portfolio surgery or a sign they’re just tired of answering questions about why their stock resembles a sinking ship.

Why This Isn’t (Entirely) a Sad Story

Spectrum’s pet care and home garden segments are the quiet MVPs here. Turns out people still buy flea shampoo and fertilizer, even when the economy feels like it’s been left in the microwave too long. Their distribution network spans everything from Amazon to the gas station checkout aisle, where I once bought a Remington hair straightener while questioning all my life choices.

Callodine’s thesis seems to hinge on this: that essential consumer goods are like a bad habit-you might cut back, but you won’t quit entirely. And at these prices, even a modest rebound could feel like winning the lottery with a scratch-off.

Glossary (For Those Who Pretended to Understand What Just Happened)

13F AUM: The SEC’s quarterly “show and tell” for funds, where they reveal their favorite toys.
Dividend Yield: The “thank you” note from a company, expressed in cash.
Forward P/E: A crystal ball with a 50% accuracy rating.
Consumer Defensive Sector: Where companies sell stuff you’ll buy even if you’re broke and crying into your soup.

Is Spectrum Brands a multibagger? No. But sometimes, the best stories aren’t about home runs-they’re about singles, a solid pair of garden shears, and the quiet hope that someone, somewhere, still needs a new hair dryer. 🐾

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2025-12-02 21:42