Should Investors Buy Spectrum Brands as Callodine Capital Keeps Adding to its Largest Position?

On Nov. 13, 2025, Callodine Capital Management, LP disclosed a buy of 360,898 shares in Spectrum Brands (NYSE:SPB), increasing its stake by an estimated $18.32 million.

What happened

According to a filing with the U.S. Securities and Exchange Commission, for the period ended Sept. 30, 2025, Callodine Capital increased its investment in Spectrum Brands by 360,898 shares.

The position’s value rose by $18.32 million from the previous quarter, bringing the fund’s total holding to 1,714,955 shares, worth $90.09 million as of Sept. 30, 2025.

What else to know

The transaction was a buy, and Spectrum Brands now accounts for 7.89% of Callodine’s 13F AUM.

Top holdings after the filing:

• Spectrum Brands Holdings (NYSE:SPB): $90.09 million (7.9% of AUM)
• Wolverine World Wide (NYSE:WWW): $74.13 million (6.5% of AUM)
• Viatris (NASDAQ:VTRS): $68.72 million (6.0% of AUM)
• Blue Owl Capital (NYSE:OWL): $66.07 million (5.8% of AUM)
• Equitable Holdings (NYSE:EQH): $52.95 million (4.6% of AUM)

As of Dec. 1, 2025, shares were priced at $57.44, down 38% over the past year, underperforming the S&P 500 by 51 percentage points.

Spectrum shares are 40% below their 52-week high.

Company Overview

Company Snapshot

Spectrum Brands:

• Offers branded consumer products across home appliances, personal care, pet care, and home and garden categories, with leading brands such as Black & Decker, Remington, IAMS, and Spectracide.
• Generates revenue primarily through product sales to retailers, e-commerce platforms, wholesalers, and distributors on a global scale.
• Targets mass-market consumers seeking household, pet, and garden solutions, with a broad distribution network spanning both physical and online channels.

Spectrum Brands is a diversified consumer products company with a global footprint and a portfolio of well-established brands.

The company leverages its scale and brand recognition to maintain a competitive position in the consumer defensive sector, focusing on essential products for households and pets.

Strategic emphasis on brand strength and multi-channel distribution enables Spectrum Brands to reach a broad customer base and adapt to shifting consumer preferences.

Foolish take

Callodine Capital primarily focuses on value stocks, and Spectrum Brands certainly fits that billing.

Callodine started buying the stock in 2022 and has gradually made it the firm's largest position over time. However, the firm has more than doubled its position in the stock over the last two quarters, as Spectrum's price dipped from $95 in late 2024 to the low $50s recently.

Following this decline, Spectrum's price-to-sales ratio of 0.5 is the lowest it has been since the 2020 crash.

Trading at this discounted price -- while offering a suite of defensive consumer goods products -- there's a lot to like about the stock as a turnaround investment.

Best yet, the company appears to be very shareholder-friendly. First, the company pays a generous 3.3% dividend yield.

Second, after selling its hardware and home improvement business for $4.1 billion in 2023, Spectrum used the proceeds to buy back nearly half of its outstanding shares.

Currently eyeing a divestiture of its home and personal goods unit, Spectrum hopes to repeat this success.

Trading at just 12 times forward earnings, these ongoing buybacks pack a mighty punch at today's discounted valuation.

Spectrum Brands may not become a multibagger anytime soon. Still, it offers an intriguing turnaround story and is anchored by its pet care and home and garden business segments, which should have tailwinds working in their favor.

While value investing isn't my preferred route to take for generating returns, I can certainly see why it is Callodine's largest position today.

Glossary

13F reportable assets under management (AUM): The total value of securities a fund must report quarterly to the SEC, showing its investment holdings.
Stake: The portion or percentage of a company owned by an investor or fund.
Dividend yield: Annual dividends per share divided by the share price, expressed as a percentage.
Forward P/E: Price-to-earnings ratio using forecasted earnings for the next year, indicating expected valuation.
EV/EBITDA: Enterprise value divided by earnings before interest, taxes, depreciation, and amortization; used to compare company valuations.
Trailing twelve months (TTM): The 12 months ending with the most recent quarterly report.
Buy (transaction): An investment action where shares are purchased, increasing the investor's position in a company.
Holding: A security or asset currently owned by an investor or fund.
Consumer defensive sector: Industry group focused on essential goods like food, household, and personal products, less sensitive to economic cycles.
Distribution network: The system of channels through which products reach customers, including retailers, wholesalers, and online platforms.
Multi-channel distribution: Selling products through multiple sales channels, such as physical stores and online platforms.
Net position change: The difference in the number or value of shares held after a transaction compared to before.

Josh Kohn-Lindquist has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Spectrum Brands. The Motley Fool has a disclosure policy.