Is PetMed Express Destined for Greatness?http://www.fool.com/investing/general/2013/10/20/is-petmed-express-destined-for-greatness.aspx Alex Planes
October 20, 2013
Investors love stocks that consistently beat the Street without getting ahead of their fundamentals and risking a meltdown. The best stocks offer sustainable market-beating gains, with robust and improving financial metrics that support strong price growth. Does PetMed Express (NASDAQ: PETS) fit the bill? Let's take a look at what its recent results tell us about its potential for future gains.
What we're looking for
What the numbers tell you
How we got here and where we're going
More than 60% of U.S. households have a pet, and this total includes 165 million dogs and cats. The total pet market surged by 6% to $53 billion in 2012, according to the American Pet Products Manufacturers Association, and a growing amount of that spending is flowing toward pet health -- over-the-counter medication spending increased by 7% to $12.7 billion last year. Fool contributor Rupert Hargreaves notes that the rising demand of animal treatments will increase the demand of animal health products in the market. In addition, some lawmakers in the U.S. government has proposed giving pet owners a tax credit of up to $3,500 for qualified pet care costs, which could certainly incentivize pet ownership the near future.
The trend toward pet ownership appears set for further growth, which should provide PetMed with all the impetus it needs on the bottom line, particularly as American pets start exhibiting more of their owners' unhealthy traits. According to the Association of Pet Obesity Prevention, some 80 million pets in the U.S. are overweight or obese, which points the way toward pet weight-loss products (there are even FitBit clones for dogs now, but PetMed doesn't sell them -- yet). Zoet