Thursday, February 22, 2007

Dog Stocks

If you are looking for information about the dogs of the Dow, this is not the place. Nor is this about the dogs of the NYSE or the dogs of the NASDAQ. This article is about dog stocks, or in other words, companies that sell to dogs (and their owners).

Last week at Madison Square Garden in New York City, The Westminster Kennel Club 131st Annual Dog Show was held, and broadcast on the USA with a very large number of viewers. In addition, the International Kennel Club Dog show will be held at McCormick Place in Chicago this weekend. Also, The Rocky Mountain Cluster Dog Show, the largest dog show in the western United States, is also running through this weekend. (Is this the dog days or what?) Dogs are big business and are big consumers of food, toys, medical care, and numerous other pet items. There are a few ways you can sink your teeth into this investment arena without barking up the wrong tree.

Petsmart Inc. (PETM) is a Phoenix company that is one of the few publicly traded be-all and do-all companies for dogs and other pets. In addition to selling toys, food, and other products, they also offer services such as grooming, baths, toenail trimming, and tooth brushing, training and boarding at their Pet Hotels, through their website and their stores. They recently agreed to buy 19 Canadian pet stores. Their earnings call is scheduled for Wednesday, February 28, 2007.Earnings estimates for the current quarter is .55 to .57, up from .47 a year ago. The stock has a P/E of 25, a price sales of 1, and even generates a small yield of almost half a percent.

On the dog medicine side of the business, there is MWI Veterinary Supply, Inc. (MWIV) which markets drugs, vaccines, equipment, supplies, pet food, and nutritional products to veterinarians. P/E is 26 and price sales of .6. There is also Patterson Companies Inc. (PDCO) which has a veterinary supply business. P/E 24, P/S 1.9.

Author does not own any of the above.


catfanratfan said...

The veterinary distributors such as mwi columbus serum webster etc are all VERY low profit low growth companies which are barely remaining solvent. Butler is the top dog(lol)in this group but they are not attractive either. Prlly a better investment would be the insurance. VPI is the one I am familiar with. There are many chains of vet clinics (banfield for instance) that will consolidate and eventually go public. These will be excellent money generating businesses. Right now the mail/internet pet pharmacy-retailer are poised to grow. They are here to stay and even though poorly operated they have great potential. FLEA control will shake this category to the core eventually. Right now Advantage and Frontline are very safe and effective. They are sold by Bayer and Merial respectivly only to veterinarians. They are then resold ,by SKANK LOSERS who must be really bad vets to stoop to this, to third parties for retail sale via internet etc. Right now only people in places with a high cost of living get much of a break ordering stuff this way. There WILL be a similar safe product sooner or later,either by patent exp or new discovery. It is the Holy Grail of pet care. If distribution is not limited to veterinary outlets then Pet Meds, Pet Smart ect will make a fortune. Thats where I will be if I hear of such a development. No products to my knowlege right now but I think Pfizer may have a new vet only flea drug in the pipeline. They are so huge that it wont move them much but if the little guys ever get a flea drug to retial you can believe this 30 billion flea control mkt will move them plenty. It may never happen but allyou can do is watch and recognise the opportunity IF it ever comes.

Howard Lindzon said...

You have great WOOF

we profiled on this week.