Top Five Animal Care Stocks
This past week on "Mad Money," Jim Cramer broke down a lot of names we often hear such as Procter & Gamble (PG) and Wal-Mart (MWT), but he also highlighted Idexx Labs (IDXX), which he called "the Costco (COST) of pet stocks."
That description prompted me to create a portfolio on Stockpickr of the Top Five Animal Health Care Stocks.
According to an August 2007 Business Week article, Americans spend an estimated $41 billion per year on their pets, and that figure is expected to grow at a compound annual growth rate of 12.3% for the next two years. Animal farm-care costs are about $25 billion and are rapidly growing, according to Congress' Office of Technology Assessment. To help prevent these rising costs, animal scientists are using biotechnology to develop an array of products to diagnose, treat and prevent disease in animals.
One of the most interesting areas is animal biotechnology, which has already had a profound impact on diagnostic testing. Many animal diseases are difficult to diagnose, and veterinarians often have to wait hours or days for laboratory results to confirm a diagnosis.However, I am much more comfortable playing this trend with animal retailers and other service-oriented companies instead of investing in the more risky (yet potentially more rewarding) biotech companies. First up is PetSmart (PETM), a retailer that also provides services in a wide market of animal care, including grooming and bathing. Also interesting here is that it also offers veterinary care services, including examinations and vaccinations, dental care, a pharmacy and surgical procedures. With PetSmart trading near its 52-week low, and with quarterly revenue growth of 7.8% and a forward
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