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I commented on this a month or so ago. Latest Q was soft. Here is a cross post from the HG Watch List board updating my thoughts and those of others:

I have been buying this one. PETS is an HG Watch list stock.

Also see the update in March 2008 HG issue.

The basic investing thesis is that PETS can continue to take market share away from Vets based upon better customer convenience. The company has seen excellent growth in EPS (31/5%/yr), CF (28%/yr.), and sales (17.5%/yr) over the last 5 years. These growth rates are likely to be lower in future but still should be quite good and more than is implied by the current stock price. Last Q was soft (see MF commentary below). But PETS financials held up very well through the recession overall prior to that.

Recent commentary:

2010 EPS expected to come in around $1.14. Stock is currently at $15.4
or around 13.5 times 2010 expected earnings.

Balance sheet is strong with no debt and $60 MM in cash. Stock pays a
2.5% dividend (initiated relatively recently.)

sw - owner of PETS in individual and managed accounts.
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