+ Watch PETM
on My Watchlist
The Company is a provider of products, services and solutions for the lifetime needs of pets.
PetSmart has all makings of a value stock you would want to own in a good economy. Since people love their pets and will always need to feed and care for them, PetSmart is certainly in a good market space. Moreover, PetSmart is arguably the biggest brand in pet retail. I would have thought that online retailers like Amazon would have hit a brick and mortar outfit like PetSmart harder, but people still seem to prefer a lot of one stop shopping for their pets' needs and PetSmart is the ubiquitous "grocery store" for pets. I know I shop at both Amazon and PetSmart for my pets, but when it comes time to load up with dog food, I take the drive to Petco and usually end up buying a lot of other stuff while I'm there. Who wants to order a 50lb bag of dog food over the internet, anyway. Nope, you're more likely going to make the drive to your local PetSmart and load it up in your car along with a lot of other impulse goodies for the best buddies. Besides, PetSmart has a nice online presence too, and has many of the little goodies I regularly get for my smaller critters at much lower prices than Amazon, who focuses on bigger movers.The thing that I think has most impressed about PetSmart, however, is the ability they have shown to maintain a pretty stream of revenue and earnings in a very tough economy. The stock had a great run from 2009 to mid 2012, but has been a bit of a laggard over the last year and a half. After it's latest pull back to an early 2013 support level as well as ratios that now look very attractive, I'm in. I trade in and out a lot and I am worried about a major pullback, possibly even a bubble bursting reversal in the general indices, but this is one I feel pretty good about as a possible buy and hold value investment. Doesn't hurt that it also pays a dividend :-)
over sold look to it
stock is beaten down recently. Good time to buy.
Solid business, no respect. I have seen complaints re profit margins, which are not great, but not out of line, maybe even better, than past unless my blurred vision lies ...
buy on the dip, hold for a few months
Good entry point for a company that knows how to execute.
The PE Relative Valuation of this stock (valuation based on historical PE/Market PE average) suggests it's undervalued by as much as 10% at a price of $72/share, so I thought I'd jump in today. It has solid growth & value metrics, and the price graph shows few wild swings -- just a steady upward trend over time. And no matter what the economy does, people love to pamper their pets.
PETM has an absurd 40% market share in the pet store business. PETCO has 20%. Together they DOMINATE the industry essentially as a duopoly. People aren't going to stop buying pets or pet supplies any time soon.Go look at the consistently high ROIC and ROE. PETM ranks higher than 95% of companies in those important metrics.Per share free cash flow went from $0.50 to $4.69 over the past decade, and it will continue to grow in the future.The share count is down from 150m in 2005 to 106m today.Reverse DCF shows PETM to be priced for 3% growth, which seems completely irrational to me. Estimates for the next 5 years are 14%. I'll go extra conservative an cut that estimate in half and say 7%, which would result in a fair value around $96, significantly higher than today's $72.70 price. So I'd conservatively value PETM around $96-$110, but it could be worth significantly more if those 5 year growth estimates are anywhere near correct. Today's FCF/EV yield is 6.4%, which I find very attractive for a dominant, growing business.Mouthwatering economics + dominant franchise + attractive price = very high probability of a favorable long-term result.
Good ROIC, growing cash, no debt, higher revenues, busting in shares. There is a lot to like in Petsmarthttp://financials.morningstar.com/ratios/r.html?t=PETM®ion=USA&culture=en-USThanks to tom e. for flagging this one.
Changing My Caps to Reflect my investing strategy. I start with a simple screener trying to find undervalued dividend paying stocks. Then because I want to invest in things I understand I eliminate any businesses I have not heard of or in areas I lack knowledge ( Financials, Precious Metals). After that I check the Caps Rating and it gets a thumbs up if it is rated 4 stars or higher. Very few 3 star companies will get a thumbs up but occasionally i will go out on a limb with one.
People love there pets and are willing to spend on them. Wait for a pull back to its 50 day moving average and buy.
Retail specialty market leader that has spurred growth with same store sales versus expansion. Ongoing product mix diversity and entrance into new markets should continue impressive revenue and income streak.
Solid and steady. I see so many people out there with dogs and poop bags. With the economy coming back and more discretionary income it should do well.
Buying dog food over the internet is not convenient. Now that people aren't losing their houses as often, PETM is more recession-resistant (people will cut back on a lot before they neglect the family dog).Valuation isn't too high (not quite a value stock), dividend growth is good, growth rate is good, largest pet retailer.If it goes lower, I will buy more. Long-term play.
PETM reported earnings yesterday - March 6, 2013. Here's what S&P had to say just one day prior to earnings:March 5, 2013 04:46 am ET ... S&P REITERATES BUY RECOMMENDATION ON SHARES OF PETSMART (PETM 65.60****): Ahead of earnings expected March 6, we are keeping our Jan-Q EPS estimate of $1.23 and maintaining our DCF-based target price of $82. Despite recent stellar results, we think the shares sold off over the past month on increasing fears related to competition from Wag.com (a subsidiary of Amazon.com), and the impact that increased spending on its own e-commerce site will have on profitability. While we don't discount these concerns, PETM has grown rapidly in recent years despite intensifying competition, and we continue to favor the company's recession-resistant characteristics.- - Michael Souers (S&P analyst)
PETM will benefit from their continued excellent same store sales and services as well as from a retiring Boomer who has money to spend on their pet(s) as their children have now grown
Much lower on very high volume.
People are spending crazy money on pets and PETM is in the sweet spot
BATS data provided in real-time. NYSE, NASDAQ and NYSEMKT data delayed 15 minutes.
Real-Time prices provided by BATS. Market data provided by Interactive Data.
Company fundamental data provided by Morningstar. Earnings Estimates, Analyst Ratings and Key Statistics provided by Zacks.
SEC Filings and Insider Transactions provided by Edgar Online.
Powered and implemented by Interactive Data Managed Solutions. Terms & Conditions