PetSmart Inc. (PETM): Today's Featured Specialty Retail Laggard

Editor's Note: TheStreet ratings do not represent the views of TheStreet's staff or its contributors. Ratings are established by computer based on metrics for performance (which includes growth, stock performance, efficiency and valuation) and risk (volatility and solvency). Companies with poor cash flow or high debt levels tend to earn lower ratings in our model.

PetSmart ( PETM) pushed the Specialty Retail industry lower today making it today's featured Specialty Retail laggard. The industry as a whole closed the day up 0.7%. By the end of trading, PetSmart fell $1.47 (-2%) to $70.20 on average volume. Throughout the day, 735,002 shares of PetSmart exchanged hands as compared to its average daily volume of 915,900 shares. The stock ranged in price between $70-$71.94 after having opened the day at $71.56 as compared to the previous trading day's close of $71.67. Other companies within the Specialty Retail industry that declined today were: PC Mall ( MALL), down 4.4%, Finish Line ( FINL), down 4.3%, Coinstar ( CSTR), down 4.2%, and Rush ( RUSHA), down 2.7%.
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PetSmart, Inc., together with its subsidiaries, operates as a specialty retailer of products, services, and solutions for pets in the United States, Puerto Rico, and Canada. PetSmart has a market cap of $7.74 billion and is part of the services sector. The company has a P/E ratio of 24.1, below the average specialty retail industry P/E ratio of 24.2 and above the S&P 500 P/E ratio of 17.7. Shares are up 39.4% year to date as of the close of trading on Tuesday. Currently there are eight analysts that rate PetSmart a buy, no analysts rate it a sell, and 13 rate it a hold.

TheStreet Ratings rates PetSmart as a buy. The company's strengths can be seen in multiple areas, such as its impressive record of earnings per share growth, compelling growth in net income, revenue growth, notable return on equity and solid stock price performance. We feel these strengths outweigh the fact that the company has had generally high debt management risk by most measures that we evaluated.

On the positive front, Office Depot ( ODP), up 21.2%, Lentuo International ( LAS), up 14.6%, iParty Corporation ( IPT), up 5.2%, and Francescas Holdings ( FRAN), up 4.4%, were all gainers within the specialty retail industry with CarMax ( KMX) being today's featured specialty retail industry leader.

For investors not wanting singular stock exposure, ETFs may be of interest. Investors who are bullish on the specialty retail industry could consider SPDR S&P Retail ETF ( XRT) while those bearish on the specialty retail industry could consider ProShares Ultra Sht Consumer Goods ( SZK).

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