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Tim Brown: PetSmart an Underdog

Stocks in this article: petm

Once a team quits, it's all over. It's a cliché to say it, but quitters never win.

Players on the Cleveland Browns are saying that some members of their squad must have quit during a fourth-quarter collapse in a 34-30 loss to the AFC West division leading Denver Broncos.

Veteran running back Jamal Lewis was the first to speak about it publicly, and several of his teammates have spoken up since, echoing those comments. The team had a brutal week in which it watched two significant second-half leads evaporate. A week ago Sunday -- vs. the Baltimore Ravens -- the team gave up 24 unanswered points. That's two tough losses in such a short period of time.

The team is just 3-6 and has the slimmest chance of resurrecting its season and getting back in the playoff race. Cleveland is in third place in its division and so far 6-3 appears to be the cutoff for the wild card spot, meaning there are a lot of games to make up and teams to leap over in order to get anywhere this year. Now, I'm not picking on Cleveland, but you need to have a winning attitude or you'll be dead in the water. Some of the players quoted in the press talked about weeding out the bad seeds, the quitters.

Things seem tough in the Dog Pound these days. Speaking of dogs, today I'm going with PetSmart (PETM). The company is going to blow out the number when it reports its earnings. For those of you not familiar with the company, it offers products for pets, such as food, clothing and leashes. In addition, it offers services such as haircuts and other forms of grooming.

I consider this company, which operates more than 1,000 stores in North America, to be recession-proof. People will always own pets and need to care for them. I picked this stock in early June and it's time to pick up more. At $17.80, this company is an absolute steal and just a buck above its 52-week low. It has lost almost 29% of its value in the last year.

The company has a hefty revenue stream of $4.9 billion. It has a solid return on equity of 17.42%. And with a forward price-to-earnings ratio of just 10.72, this company is extremely undervalued. It may have gone down since the last time I picked it, but so has the entire market. Just because it is down doesn't mean it is out. It's time to buy.

Keep moving the chains!

At the time of publication, Brown had no positions in stocks mentioned, although positions may change at any time.

Tim Brown played 16 seasons in the NFL, where he made nine Pro Bowls. After a brief stint with the Tampa Bay Buccaneers in 2004, Brown retired as an Oakland Raider. He was a Heisman Trophy winner in college for Notre Dame.

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