2-Star Stocks Poised to Plunge: Central Garden?

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Based on the aggregated intelligence of 140,000-plus investors participating in Motley Fool CAPS, the Fool's free investing community, Central Garden & Pet Company (Nasdaq: CENT) has received a distressing two-star ranking.

With that in mind, let's take a closer look at Central Garden's business and see what CAPS investors are saying about the stock right now.

Central Garden facts

Headquarters (Founded)	Walnut Creek, Calif. (1955)
Market Cap	$867 million
Industry	Household products
Trailing-12-Month Revenue	$1.67 billion
Management	CEO William Brown (since October 2007) CFO Jeffrey Blade (since September 2009)
Compound Annual Revenue and Net Income Growth (Over Past 3 Years)	3% and (12.7%)
Cash/Debt	$25.4 million/$409 million
1-Year Return	118%
Competitors	Scotts Miracle-Gro (NYSE: SMG)
CAPS Members Bearish on CENT Also Bearish on	OfficeMax (NYSE: OMX) Chicos FAS (NYSE: CHS) Freddie Mac (NYSE: FRE)
CAPS Members Bullish on CENT Also Bullish on	Altria (NYSE: MO) Johnson & Johnson (NYSE: JNJ)

Sources: Capital IQ (a division of Standard & Poor's), Yahoo! Finance, and Motley Fool CAPS.

On CAPS, 22% of the 118 members who have rated Central Garden believe the stock will underperform the S&P 500 going forward. These bears include All-Stars Fellow Fool writer Toby Shute, TMFSmashy, and mrindependent, both of whom are ranked in the top 2% of our community.

Two months ago, Toby highlighted a recent hire as a sign of bearish things to come: "Jeff Blade, who got booted from [Steak n Shake], is in as CFO. Thumbs down on that hire."

In a pitch from earlier this month, mrindependent also encouraged Fools not to water the weeds:

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.

What do you think about Central Garden, or any other stock for that matter? Make your voice heard on Motley Fool CAPS today. The CAPS community is waiting to hear your opinions. CAPS is 100% free, so get started!