Why PetSmart Is Poised to Bounce Back

Based on the aggregated intelligence of 180,000-plus investors participating in Motley Fool CAPS, the Fool's free investing community, pet food and products retailer PetSmart (NASDAQ: PETM  ) has earned a respected four-star ranking.

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

PetSmart facts

 

 

Headquarters (founded)

Phoenix, Ariz. (1986)

Market Cap

$7.2 billion

Industry

Specialty stores

Trailing-12-Month Revenue

$6.8 billion

Management

CEO David Lenhardt (since June 2013)

COO Joseph O'Leary (since June 2013)

Return on Equity (average, past 3 years)

29.1%

Cash/Debt

$262.1 million/$525.6 million

Dividend Yield

1%

Competitors

PETCO Animal Supplies Stores

Target 

Wal-Mart Stores 

Sources: S&P Capital IQ and Motley Fool CAPS.

On CAPS, 93% of the 784 members who have rated PetSmart believe the stock will outperform the S&P 500 going forward.   

A couple of months ago, one of those Fools, Gregory63, succinctly summed up the PetSmart bull case for our community:

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.

If you want market-thumping returns, you need to put together the best portfolio you can. Of course, despite a strong four-star rating, PetSmart may not be your top choice.

The retail space is in the midst of the biggest paradigm shift since mail order took off at the turn of the last century. Only those most forward-looking and capable companies will survive, and they'll handsomely reward those investors who understand the landscape. You can read about the 3 Companies Ready to Rule Retail in The Motley Fool's special report. Uncovering these top picks is free today; just click here to read more.


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