NASDAQ:PETM
$26.23
(2/9 2:42PM)
+3.3%
| Open | $26.5 |
Mkt Cap | $3.1 Billion |
| High | $27.94 |
52Wk High | $27.50 |
| Low | $25.84 |
52Wk Low | $16.17 |
| Volume | 754,929 |
Avg Vol 10D | 764,700 |
Ockham's Rating/Recommendation Summary
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PETM Revenue
As a value investing shop, we are interested in seeing how PETM's revenues measure up against past performances. One easily understandable way of doing that is to compare Price to Sales per share levels over a given time frame. Assuming it is available, Ockham prefers to look at ten years of history (for this stock there are 10 years of history available) and we weigh recent years more heavily. This allows us to find weighted average historical high and low Price to Sales ratios, which give us a better idea of the stock's current underlying value. Using this method, we have established a high range for Price to Sales of 1.07x and the low end of the range at 0.60x.
With respect to these historically rational metrics, notice that the current Price to Sales per share ratio for PETM of 0.59x is well below its normal historic Price to Sales levels. At a price of $25.35, PETM is 29% below where we would expect to see it. Clearly, this stock looks undervalued compared to historical levels, at least on a Price to Sales basis. This will positively affect our analysis because it is rare to find a stock this far below historical norms, and we would expect some price appreciation to bring this metric back towards a more normal range.
PETM Cash Earnings
As a value investment framework, Ockham Research is similar to a private equity firm in terms of our valuation methods. We are always on the lookout for value in the form of sales and cash numbers. In the case of PETM, Ockham views their current Cash Earnings as significantly below its historical average multiple of Cash Earnings. Looking at the last 10 years we can get a good understanding of what investors have grown to expect from PETM. For example, PETM's Cash Earnings ratio per share has fluctuated between 7.18 and 12.97 over this historical timeframe. This range is based upon a proprietary weighted methodology at Ockham, but can clearly show an investor where PETM is with respect to prior business periods.
So with PETM's current price (latest close of $25.35) and most recent level of Cash Earnings reported, we see significant opportunity from a value perspective. At its current price level, PETM is 29% below its average level of Price to Cash Earnings on a historical basis. This means that investors were willing to pay for a much higher stock price than currently for the same level of Cash in the past, on a relative basis. There are a couple of important things to remember, however. First, value doesn't exist in a vacuum. So if the market doesn't recognize this value, even a great disparity in Price to Cash Earnings cannot force an immediate stock price reaction. Second, patience is key when looking at securities that have reached these levels of Price to Cash Earnings versus their historical norms. So be patient with PETM.
PETM Dividends
A positive Ockham rating does not require a company to pay out an inviting dividend or a dividend at all. However, we believe dividends provide a useful measure of a company's inherent expectations.
Comparable to our analysis of Sales and Cash Earnings per share, we examine dividend yields from PETM against the historic high and low levels over an available data range. Because PETM has an established history of paying a dividend to shareholders, there is value in comparing recent dividends to historical dividends. In PETM’s case, the estimated annual dividend is $0.40 producing a current dividend yield of 1.58%. The highest dividend yield from PETM in recent history was 2.47% while the lowest dividend yield was 0.00%. It's hard not to notice that PETM pays a current dividend yield that is 27.94% above the historical median. This peaks our interest since our analysis looks favorably upon dividend yields that are greater than the historical median.
Bullish/Bearish: Sentiment and PETM Discussed on Squawk On The Street
Sentiment and investors' opinions on PETM were covered on Squawk On The Street recently and RazorWire has captured the news segment.
Crowd sentiment is favorable on this stock, as measured by the Motley Fool CAPS survey. At present, Ockham has a valuation stance of Undervalued on PETM, as we could see significant price appreciation based on current fundamentals like cash earnings and revenue. However, this stock has already had a pretty good week, making it less attractive to value investors at the current price. When taking into account the amount of news coverage each stock normally sees as a percentage of the total, PetSmart, Incorporated has actually sunk a bit in comparison to the others. Take notice of the news on this stock because it is up $2.54 since the close of trading yesterday.
“… PETSMART, it beat on earnings. Now over to brian shactman at the nymex. > > up 70 cents in crude. A bit of an oversold bounce across the world, news out of nigeria, the vice ... …”
RazorWire has Detected News About PETM on Mad Money
The latest news from business television and influential blogs is always available through Ockham's RazorWire, and this news is in relation to PetSmart, Incorporated.
The Motley Fool CAPS data suggests that investors believe PetSmart, Incorporated will beat the market in the foreseeable future. We consider PETM as Undervalued at the current price of $26.33. According to our methodology, this stock has appreciation potential based on current fundamentals which only improves if earnings or revenue surprise. As we analyze the results from RazorWire, one thing we do is rank each stock in terms of amount of news coverage. Recently, PETM has been less covered in the news compared to the rest of our universe of stocks.
“… stock symbol is woof, like a dog bark. >> it's hot as is ptm, PETSMART. They never stop spending on their dogs and cats. …”
Closing Bell Has News on PETM
News has broken via the television and viral blogs regarding PETM, so investors should take an interest in learning what was said.
Patients. They lost 7.5%. >>> PETSMART upgraded over at goldman sachs. Stocks up 4%. >>> president obama taking his first trip to asia. Up next, we'll take a look at what's on the agenda for apec, if he will actually be able to accomplish the goals on the >>> what impact will health care reform have?
“… >>> what impact will health care reform have? …”
Holding PETM Stock? See What Is Being Discussed on Squawk On The Street
The latest news on Squawk On The Street in regards to PETM come through on RazorWire recently.
Target to 19 from 17. Disney new, beating wall street estimates for the fourth quarter on strong performance of its cable networks. PETSMART upgraded from buy to naught ral. Firm increasing price target to 29 from 28. Also raising 2010 estimates on pet smart to above consensus. My turn. Dollar general discount retailer trading higher. We talked to ceo. They priced more than 34 million
“… art to above consensus. My turn. Dollar general discount retailer trading higher. We talked to ceo. They priced more than 34 million …”
PetSmart, Incorporated (PETM) Discussed on CNBC's Power Lunch
PetSmart, Incorporated is in the news. Find out how this impacts PETM trading on Ockham Research.
>> good job there, guys. Nice to meet you. >> thank you, francesca and sharky. It was a real pleasure to have you here. >> all soon to be seen at a PETSMART near you. We're coming up on the half-hour time to head to the floor of the steve grasso will give us the forecast for the rest of the day's market action. >>> big run-up for oil out of the last two weeks, $81 a barrel can you still get in or are the bulls getting tired? You're watching power lunch on
“… us the forecast for the rest of the day's market action. >>> big run-up for oil out of the last two weeks, $81 a barrel can you still get in or are the bulls getting tired? You're watching power lunch on …”
PetSmart, Incorporated (PETM) Discussed on CNBC's Power Lunch
PetSmart, Incorporated is in the news. Find out how this impacts PETM trading on Ockham Research.
>> because people are just crazy about their pets. It's a $50 billion pet care industry. We've got martha stewart here in studio with us because she has teamed up with PETSMART on a new product line. She joins us along with the executive chairman, charles koppelman and francesca and sharky stewart. >> this is sharky. And this is francesca. They have been working very hard on this deal actually and they started their own blog which attracted the attention of
“… koppelman and francesca and sharky stewart. >> this is sharky. And this is francesca. They have been working very hard on this deal actually and they started their own blog which attracted the attention of …”
PetSmart, Incorporated (PETM) Discussed on CNBC's Power Lunch
PetSmart, Incorporated is in the news. Find out how this impacts PETM trading on Ockham Research.
State of new hampshire. >>> even in a recession, people spend big bucks on their pets. Martha stewart nose all about that. She's announcing a big partnership with PETSMART. She'll join us live with her dogs. Are they going to be like tiny little dogs or big, real dog-dogs. We'll have that next. >>> keeping you up to date on the new 52-week highs today. The s&p 500 is just three points away from 1100.
“… ig, real dog-dogs. We'll have that next. >>> keeping you up to date on the new 52-week highs today. The s&p 500 is just three points away from 1100. …”
PetSmart, Incorporated (PETM) Discussed on CNBC's Power Lunch
PetSmart, Incorporated is in the news. Find out how this impacts PETM trading on Ockham Research.
Even though we have so much unemployment. Why is that? Well home making guru martha stewart is going to join us first an cnbc, tell us about her new venture with PETSMART. That stock by the way up almost 40% this year. >>> president obama's getting ready to roll out new initiatives to give smaller banks better access to t.A.R.P. I call it tiny t.A.R.P. Encouraging more lending to small business, but should small banks have access to the t.A.R.P. When it is supposed to save the system from collapse?
“… to roll out new initiatives to give smaller banks better access to t.A.R.P. I call it tiny t.A.R.P. Encouraging more lending to small business, but should small banks have access to the t.A.R.P. When it is supposed to save the system from collapse? …”
PetSmart, Incorporated (PETM) Discussed on CNBC's Power Lunch
PetSmart, Incorporated is in the news. Find out how this impacts PETM trading on Ockham Research.
What's on his agenda. Plus martha stewart is going to the dogs. >> literally. >> she going to be here to tell you about her new partnership with PETSMART and she's bringing her dogs. >> up next the "fast money" we'll see you at the top of the fidelity, say you want to backtest market experts show you how through fidelity's extensive
“… y you want to backtest market experts show you how through fidelity's extensive …”
PetSmart, Incorporated (PETM) Discussed on CNBC's Street Signs
PetSmart, Incorporated is in the news. Find out how this impacts PETM trading on Ockham Research.
What happens when you don't post the revenue number that people are looking for even if your come on out to the wall and take a look. PETSMART, its numbers were in line but its revenues missed. The stock punished by 11%. The dollar getting a bit of a what's going on down in chicago? >> it's been having slaps just about every day to be sure. Let's take a different slant. Let's look at the eurocurrency we're all aware that the dollar
“… 's going on down in chicago? >> it's been having slaps just about every day to be sure. Let's take a different slant. Let's look at the eurocurrency we're all aware that the dollar …”