Under the Radar: Pet Meds' Prescription

Despite the aforementioned positives, Pet Meds' stock has taken a beating in 2009, having declined 18% and underperformed the Dow Jones Industrial Average and S&P 500. The company's robust business model is a sign that an upward correction is imminent. Its stock currently trades at price-to-earnings ratio of 15, indicating parity with the S&P 500. But looking at peer valuation in the Internet retail industry, PetMed Express is a screaming bargain. It's 70% cheaper than its average rival on the basis of earnings.

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