PetSmart

Americans love their pets -- and that's been the secret to PetSmart's ( PETM) success.

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PetSmart is one of the largest pet supply retailers in the country, with 1,250 large-format stores across the country. The firm sells everything from pet food to supplies and toys to smaller pets in its locations; it also provides grooming, training, and veterinary services inside its stores. More than half of PetSmart's sales come from consumables such as food, treats and cat litter. As a result, the firm has hefty recurring revenue generation. PETM also has a big advantage in its store size. While most grocery stores stock pet supplies, they can't offer the selection at a big box store that's only focused on pets. That keeps traffic coming into PetSmart.

How much Americans love their pets is another important trend for PetSmart. Consumers have been consistently increasing their spending on pets each year for decades. As pets get treated more and more like full-fledged family members, that trend is very unlikely to reverse. Expect that spending trend to continue to be a solid catalyst for PETM in 2013.

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-- Written by Jonas Elmerraji in Baltimore.

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At the time of publication, author had no positions in stocks mentioned.

Jonas Elmerraji, CMT, is a senior market analyst at Agora Financial in Baltimore and a contributor to TheStreet. Before that, he managed a portfolio of stocks for an investment advisory returned 15% in 2008. He has been featured in Forbes , Investor's Business Daily, and on CNBC.com. Jonas holds a degree in financial economics from UMBC and the Chartered Market Technician designation.

Follow Jonas on Twitter @JonasElmerraji

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