Tag - Petm

Small-cap stocks remained lower into midday trading, but were also well off the morning lows as oversold conditions, erratic bargain-hunting, firm tech and retail stocks helped limit some of the gloom surrounding the latest economic news. The market continued to fret about the fate of domestic automakers, and continued to suffer money flow exit into safe-haven docks. At 12:24 p.m. ET, the Russell 2000 (NYSE:IWM) was down 3.93, or 0.95%, at 408.45.

The U.S. trading session started off on a sour note as the latest weekly unemployment claims spiked to 542,000, which marked the highest point in 16 years. Continuing claims, which represent people unable to find work, rose to 4.012 million, the highest point in 26 years. The labor market is bleak right now, and expected to get even worse over the next couple of months, the only debate is whether or not the economic “bad news” is already factored into the historic collapse in stocks. Since the Russell this morning plunged to the lowest point since May 2003, the immediate answer seems to be “no.” Still, there plenty of market watchers out there who believe that bad economic data is not a surprise and that valuations are very attractive; if the market will only get past the current crisis of confidence, then things could turn very quickly.

Of course, it’s easier said than done. Investors with cash left are piling it into credit products, regardless of how terrible the yield might be. This has become an epic week for Treasury products, with yields on 2-year notes sinking to record lows, while the benchmark 10-year note today tumbled to the lowest point in more than 5 years. The mentality in play seems to be “right now, protect my money; I’ll look for returns down the road.”

Crude oil prices tumbled below $50 a barrel, reaching the lowest point since May 2005 and energy stocks were taking a beating today, acting as a major drag on index products. The Energy Select Sector SPDR Fund was off 6.7% at . . .

Small caps were expected to open near steady levels this morning, with caution from another jump in crude oil offset by enthusiasm about a new large-cap acquisition. In overnight trading, the Russell 2000 (NYSE:IWM) was basically flat, while S&P 500 futures were just modestly above fair value.

The weekly unemployment claims report came in a little better than the forecast at 365,000 versus the expectation for 375,000. Equity futures were little changed immediately after the data.

Stock market activity overnight was flat to lower, with European shares hovering near steady levels, while Asia stocks were primarily lower. Hong Kong was off 1.6%, China down 1.9%, Singapore down 1.1% and Bombay lower by 1.9%.

There was news of a large-cap acquisition overnight between NRG Energy (NYSE:NRG) and Calpine Corp. (NYSE:CPN), in an $11 billion stock deal that could energize the bullish argument somewhat today.

Other big caps in the news this morning included Pfizer Inc. (NYSE:PFE), which was off about 1.5% on news that their anti-smoking drug had side effect issues. Also, NetApp Inc. (Nasdaq:NTAP) was down a whopping 14% as the firm’s projected earnings and revenues were below analyst expectations. PetSmart Inc. (Nasdaq:PETM) shares were off more than 5% overnight on lower-than-expected forward guidance.

Crude oil spiked higher yet again overnight, this time topping $135 dollars . . .

A recent cover story on the “Pet Economy” in BusinessWeek reported that Americans spend some $41 billion a year on their pets – more than they spend on movies, video games, and recorded music combined. Nearly half of that, according to the magazine, goes for veterinary care and medication. Pet spending may rise to $52 billion annually in the next two years – an increase of nearly 27%.
 
Figures like these make the country’s largest pet pharmacy, PetMed Express Inc. (Nasdaq: PETS), worth a closer look. The Pompano, Fla.-based company sells discount medication by mail through its 1-800-PetMeds toll-free number, website and direct mail campaigns.

Here are four reasons you should consider PetMed Express:

• It is the largest pet pharmacy and only significant discount mail-order pet pharmacy as the pet business registers double-digit growth rates.
• It has managed to source its product as it maintains an uneasy relationship with its main competitor – the fragmented veterinary practice market.
• It is recording significant internal growth in sales and profit as it increases advertising efficiency, adds new clients, boosts reorders, and upgrades service and IT.
• It has no debt and a huge cash reserve it is using to buy back its own stock.

While it seems like a surefire idea given the burgeoning pet economy, PetMed has actually had a tough time because it undercuts veterinarian sales of drugs, an important source of income for pet doctor practices. For a while, veterinarians refused to write prescriptions for the mail-order pharmacy and the company ran afoul of authorities for having alternative vets online write prescriptions without examining the pet (something not unheard of in human medication). Some of the bigger drug companies even refuse to sell directly to PetMed to avoid alienating vets, who account for a good two-thirds of pet drug sales. However, PetMed has managed to source its products through wholesalers.