>>> Rollins, Inc. (ROL), through its subsidiaries, provides pest and wildlife control services to residential and commercial customers in the United States and internationally. The company offers pest control services to residential properties protecting from common pests, including rodents, insects, and wildlife. It also provides workplace pest control solutions for customers across various end markets, such as healthcare, foodservice, and logistics. In addition, the company offers termite protection services and ancillary services. It serves clients directly, as well as through franchisee operations. Rollins, Inc. was incorporated in 1948 and is headquartered in Atlanta, Georgia.
>>> Zoetis Inc. (NYSE:ZTS)
5-Year Average Dividend Growth: 24.5%
Number of Hedge Fund Holders: 65
Zoetis Inc. (NYSE:ZTS) is a global animal health company that specializes in the discovery, development, manufacturing, and marketing of a wide range of veterinary medicines and vaccines. The company currently pays a quarterly dividend of $0.375 per share and has a dividend yield of 0.81%, as recorded on September 11. In the past five years, it raised its dividends at an annual average rate of 24.5%, which makes it one of the best dividend stocks on our list.
The Procter & Gamble Company (NYSE:PG), Colgate-Palmolive Company (NYSE:CL), and PepsiCo, Inc. (NASDAQ:PEP) are some other dividend stocks to consider for growth.
Zoetis Inc. (NYSE:ZTS) was a popular buy among elite funds with 65 hedge fund positions at the end of Q2 2023, up from 55 in the previous quarter, as per Insider Monkey's database. The consolidated value of stakes owned by these hedge funds is over $1.1 billion.
And this cash interest rates is partly why stocks are struggling. This stock "bubble" was caused by bank interest rates going to "Fuck you" from inflation plus 1% in the past.
Yes, the easy / safe 5% in cash / T-Bills is a good reason to stay on the sidelines.
For the stock allocation, my dad's strategy worked well -- 'buy quality and hold long term', so that's what I've decided to do also, instead of getting too fancy, trading, etc. You pick a stock allocation you can live with long term (I chose 20% range), fill it up with conservative solid equities, and let it go. My dad barely looked at his monthly brokerage statements, and for excitement did other things (he was a pilot). Using the stock market for excitement is a mistake that most of us make. I like following the various sectors out of general interest, but active trading is out.
Every stock I was touting in May is down. I did make out on WEAT, but lost on LAND, DBA, NEM and CDE. Glad i gout out of all of them when I did, especially CDE, who had a good day Friday, after a terrible day Thursday, so, a wash, not a buy signal.. Buying nothing. Getting bank interest again. 4.5% on everything over $25,000. Annuities , I read too much bad about the fine print details. The reason stocks have done so well is no interest like this since early this year. It has been a scam and still is, as it is below the so called real rate of inflation.
Btw, looking at the LAND chart, I had a feeling it might have to break down through the 15 support before finding its ultimate bottom. That 12.5 area was beckoning, but I wonder now if it might have to ultimately form a base in the 10-12.5 area (?) As much as I like the idea of owning farmland, LAND has been way too wild a ride, though it was great fun a few years ago. The FPI chart also looks too hairy to risk imo.
I see the nukes -- LEU, URA, URNM, NLR -- had a nice rebound after the brief selloff. I got out a while back with some modest profits, but that sector could conceivably have a lot of upside over time. Lots of landmines though, and too much Tagamet required for my nervous nellie tendencies.
>> Going WOKE in farm country <<
Yes, but 'fruit farmers' need to buy their supplies too, so it might as well be at TSCO, lol.
I see TSCO is also in the animal sector, via their 2016 acquisition of Petsense, so that adds another dimension to the company. In trying to find some suitable agro sector stocks I came upon TSCO, but admittedly it's a stretch to call it 'agro'. But it also covers the 'animal sector' (sort of), along with Zoetis. It's a great long term chart, so I figure what's not to like :o)
I don't own TSCO at the moment, but did earlier in the year (the usual $1000 position). Fwiw, here's the current portfolio (link below). Current holdings are highlighted, and the others under consideration. There's a zillion more on my various lists, but these have the best long term charts -
Tractor Supply - >>> 2 Fantastic Reasons Tractor Supply Should Continue Harvesting Growth for Investors
By Will Healy
Sep 22, 2023
Shares of the rural lifestyle retailer have risen by nearly 62,000% since 1994.
More people are moving to rural America, increasing its addressable market.
The rural lifestyle retailer is not done growing despite a 49-state footprint.
Tractor Supply (TSCO) is arguably an easy stock to write off for most investors. The company's stores are away from population centers, so it is not a fixture in areas where most Americans live.
Moreover, it has built approximately 2,200 stores spread across 49 states and has shown no apparent inclination to expand internationally. Thus, you might assume it is nearing market saturation.
Nonetheless, Tractor Supply has harvested massive returns for investors, and as it continues forward, its growth should continue for the following reasons.
1. Plenty of room for store growth
Tractor Supply has prospered by carving out a niche among rural lifestyle enthusiasts. Its primary demographic consists of the so-called "hobby farmers" who live on a few acres and engage in smaller-scale agriculture. This approach has taken the stock an astounding 61,500% higher since its initial public offering in 1994.
And the company has not hesitated to acquire retailers in related areas, like the separate Petsense chain for companion animals. It has also bought out other chains like Orscheln Farm & Home, which will become additional Tractor Supply locations. Hence, it remains expansion-minded through a mix of sticking to its core concept and serving the pet market.
Rural America has also begun to grow in population. More employees and contractors work remotely, and the pandemic prompted many former city dwellers to move to the countryside, a trend expanding Tractor Supply's addressable market.
2. Strong financials (relatively speaking)
Tractor Supply's financials have shown some resilience. Despite slow comparable-store sales growth in the first quarter, its net sales in the first half of 2023 were $7.5 billion, 8% more than in the same period last year. Net income was $604 million during the first two quarters of the year, though rising operating expenses meant its profits only grew 3% from year-ago levels.
Due to concerns about falling customer spending, Tractor Supply reduced its 2023 revenue estimate to $14.85 billion at the midpoint, down from $15.15 billion. It also adjusted its net income forecast to a mid-range estimate of $1.135 billion, down from $1.15 billion.
The stock has fallen slightly this year, but that did not stop Tractor Supply from raising its dividend by 12% in February, amounting to a near doubling of the payout in two years. With the dividend now at $4.12 per share annually, new shareholders will earn a 1.9% dividend yield, well above the S&P 500's 1.5% payout.
The retailer has hiked its payout every year since introducing it in 2010, raising its profile as a dividend stock, especially with the size of the aforementioned increases. So investors might want to buy it despite its price-to-earnings ratio of 21, a moderate level considering the history of the stock.
Consider Tractor Supply
Despite an extensive 49-state footprint and some recent sluggishness, Tractor Supply is not done returning bumper crops of growth and earnings. The company has many avenues related to its core business that it can take advantage of, especially with a rising rural population.
Even at a moderate valuation, its history of massive growth and a fast-growing dividend should help boost the retail stock. If more urban investors take notice of Tractor Supply's success in the countryside, it could reap a bountiful harvest.
I think TSCO will be a good play, but not for my favorite reasons. Like Bayer, Target, Disney and others they came out WOKE to satisfy the big Deep State money. Going WOKE in farm country makes as much sense as selling ice cubes in Alaska. They like paid their dues.
I like to see the stock break above the major moving averages before I'd buy.
>>> Zoetis -- Animal health specialist Zoetis has hit the ground running, more than quintupling its payouts since initiating its dividend in 2013. Zoetis is the largest business of its kind, creating vaccines, medicines, and diagnostics for pets and livestock, and generating $8.2 billion in sales and $2.2 billion in net income over the last year.
The company is incredibly well-balanced with its products ranging from dermatology and osteoarthritis pain treatments to parasitic medicines and medicated feed additives. Zoetis generates 64% of its revenue from pets and 36% from livestock. Meanwhile, U.S. sales account for 54% of total revenue, while international markets comprise 46%.
Best yet for investors, Zoetis has 15 drugs that each earn over $100 million in annual revenue, highlighting the depth of its product offering and the strength of its research and development (R&D) capabilities. With 11% of its 13,800 employees working in R&D, this innovation is well-funded and should maintain a robust pipeline for decades ahead.
With Zoetis' rising ROIC of 19% and small payout ratio of 29%, look for it to provide above-average dividend growth. But with the shares trading at 40 times earnings and offering a 0.8% dividend, it may be best to buy on drops or though dollar cost averaging.
>>> IDEXX Announces Novel Diagnostic Test for Kidney Injury, Expanding the Veterinary Industry's Most Comprehensive Renal Testing Portfolio
June 15, 2023
The IDEXX Cystatin B Test can help veterinarians detect kidney injury before changes in kidney function, promoting better patient outcomes
WESTBROOK, Maine, June 15, 2023 /PRNewswire/ -- IDEXX Laboratories, Inc. (NASDAQ: IDXX), a global leader in pet healthcare innovation, today announced the launch of the first veterinary diagnostic test for detecting kidney injury in cats and dogs. According to a recent IDEXX survey, as many as one-third of kidney cases seen by veterinarians are related to kidney injury, and a diagnosis can be challenging due to subtle or nonspecific signs.1 The IDEXX Cystatin B Test will be included in test panels assessing renal health, uncovering new clinical insights for an estimated two million patient visits annually. These tests will be run at IDEXX Reference Laboratories starting later this year in the U.S. and Canada, with plans to introduce the test in Europe in 2024.
The kidneys are vital to the overall health of a patient, regulating blood pressure, electrolyte balance, and red blood cell production, and removing toxins. IDEXX SDMA testing provides veterinarians with unmatched insights into kidney function, and the IDEXX Cystatin B Test will enhance their view into kidney health by detecting injury and providing additional clarity when a change in kidney function may not be apparent. Together, the IDEXX Cystatin B and IDEXX SDMA® tests offer a comprehensive view of the kidneys by uncovering structural injury and impaired kidney function.
"With the addition of the IDEXX Cystatin B Test, we are pleased to offer the industry's first biomarker for kidney injury," said Jay Mazelsky, IDEXX President and Chief Executive Officer. "The IDEXX portfolio of tests and technologies enables veterinarians to intervene earlier, advance treatment, and now detect kidney injury, resulting in better outcomes throughout the lives of their patients."
The IDEXX expanded renal testing portfolio now includes:
IDEXX Cystatin B Test, detecting kidney injury with or without changes in kidney function, providing valuable insights in cases such as early toxin exposure.
IDEXX SDMA® Test and creatinine, helping to establish a baseline for kidney function for monitoring and early kidney disease detection.
IDEXX FGF-23 Test, allowing for more confident recommendations of targeted therapy for cats diagnosed with chronic kidney disease (CKD) by monitoring phosphorous overload.
Urine testing, providing a deeper understanding of total kidney health by examining the physical and chemical properties of urine.
For more information on the IDEXX Cystatin B Test and IDEXX kidney health solutions, please visit IDEXX Cystatin B.
A joint statement from three founding members of the American College of Veterinary Nephrology and Urology accentuates the value this novel biomarker holds in the industry and aligns with a recent statement from the International Renal Interest Society (IRIS):
"The advent of diagnostic biomarkers capable to detect the presence of acute kidney injury as well as active and ongoing kidney injury in advance of or in the absence of changes in conventional markers of kidney function forecast an important advance in the evaluation of acute and chronic kidney disease in dogs. The development and validation of Cystatin-B as an active kidney injury biomarker in dogs that will be readily available to veterinarians has the potential to reshape the future diagnostic and therapeutic directions of kidney disease. As nephrologists, we anxiously await this new era of early disease discovery and management."
Dr, Gilad Segev, DVM, Dip. ECVIM-CA (Internal Medicine)
American College of Veterinary Nephrology and Urology, Founding Member
Associate Professor of Veterinary Medicine
Head, Small Animal Internal Medicine
Koret School of Veterinary Medicine
The Hebrew University of Jerusalem
Dr. Shelly Vaden, DVM, PhD, DACVIM (SAIM)
American College of Veterinary Nephrology and Urology, Founding Member
Professor Internal Medicine (Nephrology and Urology)
Medical Director, Extracorporeal Therapies
Chief of Staff, Small Animal
North Carolina State University, College of Veterinary Medicine
Larry D. Cowgill, DVM, PhD, Dipl. ACVIM (SAIM)
American College of Veterinary Nephrology and Urology, Founding Member
Professor, Department of Medicine & Epidemiology
2108 Tupper Hall
School of Veterinary Medicine
University of California-Davis
IDEXX is a global leader in pet healthcare innovation. Our diagnostic and software products and services create clarity in the complex, constantly evolving world of veterinary medicine. We support longer, fuller lives for pets by delivering insights and solutions that help the veterinary community around the world make confident decisions—to advance medical care, improve efficiency, and build thriving practices. Our innovations also help ensure the safety of milk and water across the world and maintain the health and well-being of people and livestock. IDEXX Laboratories, Inc. is a member of the S&P 500® Index. Headquartered in Maine, IDEXX employs nearly 11,000 people and offers solutions and products to customers in more than 175 countries. For more information about IDEXX, visit: idexx.com. For media inquiries, please get in touch at firstname.lastname@example.org.
Tractor Supply - >>> In 2009, the worst year of the Great Recession, Tractor Supply's net sales increased by almost 7%. To be fair, the company's net-sales increase was the result of opening new stores -- it opened 76 that year. By contrast, same-store sales (a measurement of sales at existing locations) fell 1.1%. But that's actually still quite resilient during an economic downturn.
In my opinion, there's a simple explanation for Tractor Supply's resiliency. In 2009, 39% of net sales were in the livestock-and-pet category -- an expense animal owners will pay even during lean times. And this category is only more important for Tractor Supply now. Investors are waiting on the annual filing for 2022, but livestock-and-pet sales accounted for 47% of sales in 2021.
To put this all into perspective, Tractor Supply's supply chain moved more than 8 billion pounds of animal feed in 2022. To me, that's too much weight for e-commerce companies to want to get involved.
Moreover, on the topic of resiliency, Tractor Supply had over 28 million members in its customer loyalty program at the end of 2022, up 20% year over year. These customers accounted for 75% of the company's sales last year, suggesting its core customer base is a big fan of the brand -- something that can help it remain strong during any potential economic downturn.
With fiscal discipline, ongoing sales growth, and regular share repurchases, Tractor Supply's earnings per share (EPS) are growing at a rate capable of carrying the stock to market-beating gains. Its regular increases to the dividend are generous as well, as the chart below shows.
Tractor Supply Company - With 27 million members in its Neighbor's Club rewards program, Tractor Supply and its 2,100 stores are a dividend growth success story in the footsteps of Home Depot and Lowe's. Since 2010, Tractor Supply has boosted its quarterly dividend payments from $0.035 per share to $0.92 today, an increase of over 2,200%. Buoyed partly by these dividends, the company has outpaced the market over the last five years.
So how exactly does Tractor Supply do it with behemoths like Home Depot and Lowe's in its backyard? In the simplest terms, it's by being the rural version of its giant peers. Consider that almost half of the company's sales come from its livestock and pet category. Through this niche offering, Tractor Supply draws millions of farmers, ranchers, and even suburban gardeners to its stores with its adjacent, yet quite distinct, product offering and hometown feel.
Once in the company's ecosystem, these customers often sign up for its rewards program and become loyal members. For example, since the pandemic's start, Tractor Supply saw 19 million new customers -- 55% of which became repeat purchasers.
The shares trade at just 23 times earnings, and the company's 1.8% dividend only uses 35% of its total net income. Raising its last dividend by 77%, Tractor Supply makes for a fascinating dividend-growth selection to hold forever.
Zoetis - In a recent survey by The Human Animal Bond Research Institute and Zoetis, 86% of pet owners and veterinarians said they would pay whatever was necessary for extensive vet care. While it is sad to consider any adverse outcomes concerning our beloved pets, the fact remains that Zoetis and its array of pet and livestock vaccines and medicines should only continue growing in importance.
In fact, since going public via a spinoff from Pfizer in 2013, Zoetis posted a total return of nearly 500%. Over the last five years, the company has almost tripled the returns of the S&P 500 Index despite falling by 19% in the previous year.
In the $45 billion animal health industry, Zoetis generates 61% of its sales from companion animals (cats and dogs) and 39% from livestock. Boasting a leadership position in pets, cattle, and swine (not to mention North America, Latin America, and Asia -- geographically speaking), the company maintains a portfolio of over 300 products.
Riding this success, Zoetis has grown sales and EPS by 9% and 13%, respectively, over the last three years. Over this same time, the company raised its dividend by 25% annually and now yields 0.9% with a small payout ratio of 26%. Thanks to the megatrends working in its favor and its steady growth, Zoetis trades at a rich 37 times earnings but makes for an outstanding dividend growth stock.
>>> Rollins, Inc. (ROL), through its subsidiaries, provides pest and wildlife control services to residential and commercial customers in the United States and internationally. The company offers pest control services to residential properties protecting from common pests, including rodents, insects, and wildlife. It also provides workplace pest control solutions for customers across various end markets, such as healthcare, foodservice, and logistics. In addition, the company offers traditional and baiting termite protection, as well as ancillary services. It serves clients directly, as well as through franchisee operations. Rollins, Inc. was incorporated in 1948 and is headquartered in Atlanta, Georgia.
$RIBT Premium Pet Food Still in Demand
People may be trading down to store brands for their own food, but they’re still out to pamper their pets.
Two leading pet retailers told CNBC that they have not seen any trend away from premium food, despite inflation. Both Petco and Chewy said most of their customers are not looking to save on food, although both said that they had been drop in spending on non-food items like leashes and toys.
Petco is expanding its offerings in premium pet food. It is partnering with Clif to make snack bars for dogs, and recently launched a line of frozen dog food.
“Pet parents are driving one of the biggest trends the pet industry has seen as they increasingly seek out fresh, human-grade food for all members of the family,” Petco CEO Ron Coughlin said in a release quoted by CNBC.
In fact, both Chewy and Petco reported year-over-year sales rises of 13% and 3.2%, respectively, for the most recent quarter. Both said consumer shifts toward more premium food were a factor in those increases.
Zoetis - >>> Pet health ‘has proven to be recession resistant': Zoetis CFO
by Ethan Kimball
August 10, 2022
While some industries have proven to be vulnerable to the recent economic downturn and record inflation, pet health care is not one of them.
“If you look at animal health historically, it has proven to be recession resistant," Wetteny Joseph, chief financial officer of Zoetis (ZTS), a global animal health company, said on Yahoo Finance Live (video above). “The demographics of pet ownership have trended towards millennials and Gen Z, and they place a higher premium on the health of their pets.”
Strong demand for animal health care products can be attributed to the increase in demand for pets during the COVID-19 pandemic.
According to a 2021 survey from the American Pet Products Association (APPA), the percentage of U.S. households that had pets increased in 2020 from 67% to an all-time high of 70% as more Americans sought out comforting companionship during the lockdown period.
Furthermore, pet owners who took the survey also stated that they spent more on their pets now than they did before the onset of COVID-19. An estimated $123.6 billion was spent on pets in 2021, with $34.3 billion used towards veterinary care.
"Despite the broader uncertainty in the economic environment, pet spending and the prioritization on pet health remains very strong," Joseph said. "And the underlying fundamentals of the industry remain strong."
'We don't see any signs of slowing down'
For Zoetis, an essential aspect of the company's business model is its medications being recommended by veterinarians.
The company reported a strong quarter, with 8% operational growth in revenue and 9% in adjusted net income, "driven by a companion animal portfolio," Joseph said, while the companion animal business grew 14% operationally on a global level.
“Puppies and kittens need to go see the vet,” he said. “That created a really high watermark, if you will, if you go back in the first half of last year. But as we tracked visits to the clinic over a number of years, the visits in the second quarter were the fourth-highest of visits that we have on record. So it's just a matter of [comparison]."
Vet visits are down 1.3% YOY but revenue is up 6.4%. showing that owners are still willing to spend money on pet health.
Although visits to the vet are down roughly 1.3% year-over-year, revenue is up 6.4% in that same time, according to the American Veterinary Medical Association (AVMA), meaning that when pet owners are taking their furry friends to the vet, they're willing to spend money, even as millions of Americans have started to pull back on spending in other consumer categories.
According to Joseph, that's indicative of a "much higher correlation" to how Zoetis performs due to the innovation it brings to the market.
"Given more pets and higher prioritization on the health of pets, we expect that to continue to remain robust," he said, adding: "We don't see any signs of slowing down."
>>> Dogs might be able to 'see' with their noses, a new study suggests
by Claire Hills
Dogs might be using their highly-sensitive noses to 'see' as well as to smell, a new study suggests.
A team of vets, including Dr Philippa Johnson from Cornell University in New York, discovered that vision and smell are actually connected in the brains of dogs - something not yet found in any other species.
The team conducted MRI scans on a number of different dogs and successfully mapped the olfactory bulb (the part of the brain dealing with smell) to the occipital lobe (the visual processing area of the brain), shedding new light on how dogs experience and navigate the world.
It revealed an "extensive pathway" connecting to the occipital lobe but also to the limbic system, which is the part of the brain involved in behavioural and emotional responses.
Related video: Dogs can sniff out 'distinct odor' in positive diagnosis of COVID-19, researchers say
The findings, published in the Journal of Neuroscience, suggest smell and vision in dogs are therefore integrated in some way - implying they may use scent to work out where things are.
Dr Johnson told Sky News that when humans walk into a room, they primarily use their sense of vision to establish who is there or how furniture is positioned. But dogs seem to integrate scent into their interpretation of their environment and how they are orientated in it.
She added: "One of the ophthalmologists at the hospital here said he regularly has owners that bring their dogs in, and when he tests their eyesight, they are completely blind - but the owners literally won't believe him.
"The blind dogs act completely normally. They can play fetch. They can orientate around their environment, and they don't bump into things.
"Knowing there's that information freeway going between those two areas, could be hugely comforting to owners of dogs with incurable eye diseases."
"We've never seen this connection between the nose and the occipital lobe, functionally the visual cortex in dogs, in any species," added Dr Johnson, assistant professor of clinical sciences at Cornell, and senior author of the report.
In the course of their study, the team also found connections where a dog's brain processes memory and emotion, which are similar to those in humans.
>>> Zoetis Completes Acquisition of Basepaws, an Innovative Leader in Petcare Genetics, to Strengthen its Portfolio of Precision Animal Health Solutions
June 22, 2022
PARSIPPANY, N.J., June 22, 2022--(BUSINESS WIRE)--Zoetis Inc. (NYSE:ZTS) today announced the completion of its acquisition of Basepaws, a privately held petcare genetics company, which provides pet owners with genetic tests, analytics and early health risk assessments. The genetic insights from Basepaws help pet owners and veterinarians understand an individual pet’s risk for disease and can lead to more meaningful engagements and increased likelihood of early detection and treatment of disease. The acquisition was first announced on June 7th, and financial terms of the transaction were not disclosed.
"When we first met Basepaws CEO Anna Skaya and the team, we were immediately drawn to their passion for pets and the role that genetic testing and data analytics can have in advancing animal care – a purpose that drives us every day," said Zoetis CEO Kristin Peck. "The addition of Basepaws will enhance our portfolio in the precision animal health space and inform our future pipeline of petcare innovations. Working together, we can continue to provide veterinarians and pet owners with more comprehensive ways to proactively manage the health, wellness and quality of care for their animals."
Basepaws is a petcare genetics company that builds early detection health risk tests based on genetic and microbiome data. Basepaws is committed to companion animal health research, and it has the world’s first at-home genetic testing platform for cats. Founded in 2017 by Anna Skaya, the company is based in Los Angeles, CA. For more information, visit www.basepaws.com.
As the world’s leading animal health company, Zoetis is driven by a singular purpose: to nurture our world and humankind by advancing care for animals. After 70 years innovating ways to predict, prevent, detect, and treat animal illness, Zoetis continues to stand by those raising and caring for animals worldwide – from livestock farmers to veterinarians and pet owners. The company’s leading portfolio and pipeline of medicines, vaccines, diagnostics and technologies make a difference in over 100 countries. A Fortune 500 company, Zoetis generated revenue of $7.8 billion in 2021 with approximately 12,100 employees.
>>> The 3 Best Pet Stocks to Buy Now
by Larry Ramer
July 4, 2022
During the pandemic, many Americans got pets to keep them company when the lockdowns forced people to stay at home. Surveys and common sense indicate that most people will keep their new pets. With pets having become an integral part of millions of more American families, many companies are benefiting financially. Investors can hop on that trend by buying the best pet stocks.
As someone who works from home, doesn’t have children, and has two pets, I can attest that pets can certainly help fill the social void caused by a lack of physically present co-workers and children. I can also tell you that pets can be somewhat costly. All together, the food, health care, health insurance, grooming, and pet sitting services my wife and I purchase for our dog, Dallas, and our cat, Strawberry, are far from cheap. So, companies are making a great deal of money from us and from the millions of other pet owners out there.
Three of the best pet stocks to buy benefit from Americans’ increased spending on their pets. Let’s take a look:
Petco Health and Wellness (WOOF)
One of the largest retail chains focused on selling products for pets, the company has about 1,500 stores in the United States, Mexico, and Puerto Rico. In addition to selling almost every pet product you could think of both online and in stores, Petco also offers grooming services, sells pet insurance, and provides veterinary services at 200 of its locations.
Moreover, in March, the retail chain announced that it would partner with Rover.com, which it described as “the world’s largest online marketplace for loving pet care, to connect Petco customers to pet sitting, boarding and dog walking services.”
It’s hard for other companies to compete with Petco’s tremendous physical footprint and brand recognition, while the barriers of entry are high for veterinary services and pet insurance. Therefore, I’m not surprised that Petco is quite profitable, while its top and bottom lines have been growing impressively in recent years.
On the revenue front, the company reported $4.9 billion for 2020 and $5.8 billion for 2021.
WOOF stock has a reasonable forward price-earnings ratio of 16.08.
Elanco Animal Health (ELAN)
Elanco (NYSE:ELAN) sells medicine for both pets and farm animals. In 2020, it acquired Bayer’s animal health business, enabling it to become one of the world’s leaders in the space.
In the last year, the company has been hurt by the coronavirus pandemic, which kept people from taking their pets to veterinarians. It also faced headwinds by an outbreak of bird flu among chickens and turkeys. But in the last several quarters, the company seems to have regained its momentum.
In the fourth quarter of 2021, for example, its revenue growth, excluding the impact of the Bayer deal, came in at about 7%. Meanwhile, the expansion of its pet medicine business boosted its overall gross margin by 4.6 percentage points, raising it to 56.6% overall. And its fiscal 2021 earnings per share came in at $1.05, way up from just 58 cents during the previous year, which was negatively impacted by the pandemic.
In the first quarter of 2022, Elanco’s net income came in at $48 million, versus a net loss of $61 million during the same period a year earlier. For all of 2022, Elanco expects to generate $1.15 to $1.21 of earnings per share. At the midpoint of that range, its forward price-to-earnings ratio would be an attractive 17.
Elanco is still facing challenges, including problems with its businesses in Ukraine and China. Over the longer term, however, those issues should dissipate. Meanwhile, the company expects to seek approvals for a few of its propriety drugs in major markets this year. By next year, the proceeds from those drugs should significantly boost its top and bottom lines.
Idexx Laboratories (IDXX)
Idexx Laboratories (NASDAQ:IDXX) provides diagnostic tools for pets and farm animals. Like Elanco, barriers of entry for Idexx’s sector are likely to be very high, since accurate medical diagnostic tools are not easy to produce.
What’s more, Idexx is well-established in the sector, as its top line in 2021 came in at a robust $3.2 billion, up from $2.7 billion in 2020.
Idexx expects to generate earnings per share of $8.11 to $8.35 this year. Additionally, it expects its revenue, excluding acquisitions, to increase at a healthy 7.5% to 10% pace in 2022.
Finally, conferring a great deal of respect upon IDEXX stock, Credit Suisse named it one of 25 names whose stocks are down a great deal, but whose earnings are rebounding. Additionally, Goldman Sachs (NYSE:GS) included it on a list of “stable stocks.”
While RIBT sounds interesting, I wouldn't get married to it or any other stock. I used to follow a some small caps very closely (I thought), but in the end my analysis turned out to be wrong and the companies ultimately bombed out. So I no longer trust my own ability to accurately analyze a stock, at least not well enough to have a big position. That was the logical conclusion to come to, so now I stick to broad index funds, with some sector funds and individual stocks thrown in, but with $1000 limits, and all within a disciplined asset allocation model. The results have been much better, with individual stocks relegated to a fun hobby, so it's a win-win. No chance to get rich quick, but 'get poor quick' is also eliminated as a possibility :o)
That said, RIBT might end up being a great turnaround stock, but remember what Warren Buffett said about turnarounds in general - “turnarounds almost never turn around”.
They have not had a CEO since 11/19. Bradley paid mainly in warrants to make losses look better? But also, he must have some faith in the company. Mitchel was only the CFO. Late last year he got like 1,000,000 warrants at "0"., not exerciseable for 1 year from the date for 5 years the stock was .35 then. And he became the COO with no salary. So, he must believe in the company too. If they keep putting out good info, all the attention the Reddit dudes gave RIBT coul dhelp get it over $1 by 9/12.
My thought only , heard no hints. >>>>> Bradley has talked a lot about partnerships. Some may be coming, AIDP is the only one now and not a big deal, so far. Bradley at the last CC and especially at the Instutuional show last month, was not all excited about owneing the rice mill at Golden Ridge. they paid $7.9M for it and some improvements made since. They'd keep their stabilizing attachment and an all bran human addition and get maybe $8.5 in a sale for a partnership of some sort. The had plenty of cash on hand after Q1 and only lost $500,000. They are not cash strapped. What and with who, no idea. maybe more than one partnership.
The pet food side seems to be the most promising. They did talk about a new horse product based on SRB and Oats. Horses love both. Both sites, Mermentau and MGI are being expanded. Can only guess, Chewy or such as a partner. Their SRB horse feed, made by someone else, has been sold for years at Tractor supply. Either of them as a partner, probaly not. Just thinking out loud.
I put more money in my Schwab account today. If they lose their listing, I will pile it in on the announcement.
Bedtime for Bonzo, thank for your support gfp!!