In market speak, so-called "cats and dogs" set the bar for
underperforming or flawed stock picks. That's why, in a bull
market, we may hear analysts crack that everything is on the rise
the cats and dogs. An outdated pejorative perhaps, considering
these furry creatures are the drivers of a growth sector that not
only survived recent economic downturns, but barked and purred all
the way to the bank.
Figures from the American Pet Products Association tell us that the
pet industry has
more than tripled
over the past two decades. In 1994, the first year the organization
began gathering data from various market research sources, US
animal owners doled out $17 billion in pet products and services.
This year, that figure is expected to climb to over $55 billion.
Between 2007 and 2009, spending on our furry family members rose by
$4.3 billion. So, during the Great Recession's bear market, we may
have heard analysts crack that everything was on the decline --
the cats and dogs.
Here, Minyanville will take a look at some of the stocks pet-loving
investors may want to consider adding to their portfolios.
Because pets need to eat...
It may be the most repulsive thing we'll ever see or smell in a
can, but at $20.64 billion, kibble takes the biggest bite out of
the American pet market, and
Procter & Gamble
) claim the overwhelming global majority of it.
And in our ongoing effort to anthropomorphize our pets, mealtime is
more and more mimicking the habits and preferences of the
utensil-using set. Though Fido couldn't give the contents of his
pooper scooper about frozen treats and craft beer, leave it to
NestlÃ© to start shilling
ice cream (in 2011) and a brewery in Victoria, Canada, to concoct a
beer for dogs
In January, Minyanville's own Hoofy and Boo
on our need to ascribe to animals our cultural and religious
dietary leanings with the continuing trend of vegan products and
kosher pet food "manufactured under strict Rabbinical supervision."
What else are we supposed to serve them at Pesach let alone their
Because they keep
If the studies that say pets improve the health of their human
parents -- boosting immunity, lowering blood pressure, and keeping
depression at bay -- are true, it seems we owe it to them to return
the favor. And if the market research about the pet health industry
is accurate, many of us indeed already are.
A generation ago, when our four-legged companions were diagnosed
with serious and/or expensive medical conditions, the tendency was
to "put them down." Today, a kinder, more compassionate society is
starting to offer them real status in the family unit and treating
them to the benefits usually reserved for its bipedal members.
Beyond traditional flea and worming treatments and vaccines, human
areas of medicine like oncology, cardiology, dermatology, and
opening up to animals
Big Pharma has taken notice of the $12.65 billion that went to
supplies and over-the-counter medicine last year -- in addition to
the $13.67 billion collected by veterinary clinics -- and they want
(OTCMKTS:BAYRY) acquisition of the vet-drugs unit of
Teva Pharmaceutical Industries
) for $145 million, or
) Merial buying out the animal-health division of India-based Dosch
Pharmaceuticals. That being said,
) recently stepped away from pet health by
fully divesting ownership
(ZTS), the largest producer of medicine and vaccinations for
companion animals and livestock.
Want to invest in stocks that distribute pharmaceuticals,
diagnostics, equipment, software, and other medical products to
veterinarians and animal clinics? The big dogs on the market are
MWI Veterinary Supply, Inc.
Patterson Companies, Inc.
a North American-based system of over 600 animal hospitals, also
has a diagnostic and a marketing-solutions arm.
Because we shop on their behalf...
Of course, revenues from food and over-the-counter and even
prescription medical products for pets also bleed into the retail
sector, which is dominated by just two companies -- and only one
that's publicly traded. Together,
(PETM) 30.9% and Petco's 19.9% market share
comprise about 51% of the pet store industry
and account for most of its growth. Beyond doggie beds, cat condos,
and LED-lit aquariums, these superstores offer services like
training, grooming, daycare, and even overnight "hotel"
To be fair, with an online catalog of
-- for every species from insects to horses --
(AMZN) should officially be considered a major player in the pet
retail space, if only in the e-commerce category. Through its
acquisition of Quidsi, Amazon even launched a dedicated pet store
in 2011 with Wag.com.
And, finally, because they're so telegenic...
No well-balanced roundup of stocks benefiting from animal lovers'
slow descent into insanity would be complete without mentioning the
one place it is most often manifested. Since its first uploaded
video of elephants at the San Diego Zoo,
(GOOG), has been a virtual breeding ground for petxhibitionists and
their patty-cake-playing cats, skateboarding bulldogs, and
dubstep-singing parrots as well as the voyeurs who enjoy them.
Truly, if any video will ever eclipse the view count of "Gangnam
Style," it'll be one of a hamster dancing "Gangnam Style."