NEW YORK (TheStreet) -- Specialty retailer PetSmart (PETM) is a dividend-paying stock crushed after reporting slower-than-expected first-quarter growth earlier this week. The market is overreacting and I think the stock is a buy.
As a short-seller, I recognize a heavily shorted stock with increasing earnings per share and a growing dividend is no longer a short candidate if it falls below fair value.
Short-sellers have called this one right, but they are also intensely crowded with over 17% of the float shorted. Following the price decline the tide has shifted, and short-sellers are planning their exit strategy.
At around $55.30, PetSmart shares are down 24% for the year to date.
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