People Love Their Pets
Despite all the worries about oil, inflation, interest rates, the economy, and war, there is one truth that cannot escape mankind– people love their pets.
For quite a while, the pet care industry investment theme has been a favorite of mine, and I’ve been fortunate to find some really good stocks in this sector of the market.
One company that’s been written about many times in this column is PetMed Express (NASDAQ/PETS). This is a really innovative company that sells pet and large animal medications and products over the Internet. Traditionally, only veterinarians sold these products and they made a fortune doing so. PetMed Express is a real success and the company really turned the entire industry upside-down.
The stock hit a high back in March, and has since retreated as the company’s growth has slowed. Still, I think there’s a lot more growth to come from this company.
Speaking of pet care stocks, one stands out as an excellent investment opportunity for the long-term. This large-cap company has distinguished itself with its financial growth and its success on the stock market. The company is VCA Antech (NASDAQ/WOOF) and I think there’s many years of solid growth to come from this well managed company.
In its latest quarter, the second quarter of 2006, and the company’s revenues grew 23.5% to a record $255.2 million. Net income grew to $29.6 million, up substantially from net income of $11.3 million generated in the second quarter of 2005.
VCA Antech recently raised its guidance and, in my estimation, represents a kind of recession-proof type investment. No matter what happens to the economy, people will still spend money on their pets.
Over the last year, VCA Antech’s stock price appreciated some 40%. It’s unlikely it can generate this kind of return in the future, but make no mistake: This company is still on a substantial growth path.