In this article, we will take a look at the 5 best pet stocks to buy now. To read our analysis of the recent market trends and activity, you can go to the 12 Best Pet Stocks to Buy Now.
5. Tractor Supply Company (NASDAQ:TSCO)
Number of Hedge Fund Holders: 28
Founded in 1938, Tractor Supply Company (NASDAQ:TSCO) is the largest rural lifestyle retailer in the U.S. It operates 2,198 Tractor Supply stores in 49 states and 195 Petsense by Tractor Supply stores in 23 states.
On October 26, Tractor Supply Company (NASDAQ:TSCO) released its financial results for Q3 2023. It generated revenues of $3.4 billion and net income of $255 million. The normalized EPS was recorded at $2.33 for the quarter, which exceeded consensus estimates by $0.04.
Tractor Supply Company (NASDAQ:TSCO) has a long history of regular quarterly payments to its shareholders. In addition, the company also increases its dividend payouts periodically. In February, it increased the payout by 12% to $1.03 which marked the 14th consecutive year of increasing dividend payouts.
According to the Insider Monkey data on 910 leading hedge funds, 28 hedge funds were long Tractor Supply Company (NASDAQ:TSCO) shares as of Q3 2023, with the total shares held by hedge funds valued at $415 million. Robert Joseph Caruso’s Select Equity Group was the largest hedge fund shareholder with ownership of 1.5 million shares valued at $301 million.
4. Spectrum Brands Holdings, Inc. (NYSE:SPB)
Number of Hedge Fund Holders: 31
Based in Middleton, Wisconsin, Spectrum Brands Holdings, Inc. (NYSE:SPB) is a home-essentials company providing specialty pet supplies, lawn and garden and home pest control products, personal insect repellents, shaving and grooming products, personal care products, and small household appliances.
On June 20, Spectrum Brands Holdings, Inc. (NYSE:SPB) announced the closing of the sale of its Hardware and Home Improvement business to ASSA ABLOY for $4.3 billion in cash. The company expects net proceeds of nearly $3.6 billion and expects to use them to reduce its indebtedness, strengthen our operating performance and fund opportunistic M&A activities. In addition, the company plans to return capital to its shareholders, which includes a $1.0 billion share repurchase program.
Heartland Advisors, an investment management company, made the following comments about Spectrum Brands Holdings, Inc. (NYSE:SPB) in its Q3 2023 investor letter:
“After several divestitures in recent years, Spectrum is mostly a pureplay Consumer Staples company focusing on pet care and home and garden supplies, including recognizable brands such as Spectracide lawn and garden products and SmartBone dog treats. Colin McWey Vice President and Portfolio Manager Will Nasgovitz CEO and Portfolio Manager Troy McGlone Vice President and Portfolio Manager SPB is in the process of transforming itself from an acquisition-oriented holding company into an integrated operating company with sharper focus. As part of that process, the company recently divested its Hardware and Home Improvement segment, selling it to the Swedish conglomerate Assa Abloy for $4.3 billion in cash. [. . .] This gives SPB ample capacity to repurchase shares at a steep discount to intrinsic value while setting the stage for operational improvements. Meanwhile, the stock trades at just 7X next year’s EBITDA and 5X to 5.5X normalized EBITDA.”
3. Elanco Animal Health Incorporated (NYSE:ELAN)
Number of Hedge Fund Holders: 32
Greenfield, Indiana-based Elanco Animal Health Incorporated (NYSE:ELAN) is a leading animal health company focused on providing products and services to prevent and treat disease in farm animals and pets.
On November 7, Elanco Animal Health Incorporated (NYSE:ELAN) released its financial results for Q3 2023. Its revenues increased by 4% y-o-y to $1.1 billion, while it reported a net loss of $1.1 billion which included goodwill impairment charge of $1.0 billion. It generated a normalized EPS of $0.18, which exceeded consensus estimates by $0.06.
Following the earnings release, Morgan Stanley analyst Erin Wright lowered the price target for Elanco Animal Health Incorporated (NYSE:ELAN) shares to $16 from $17 and maintained an ‘Equal weight’ rating.
As of Q3 2023, 32 of the 910 hedge funds tracked by Insider Monkey were long Elanco Animal Health Incorporated (NYSE:ELAN) and held shares worth $792 million. Ken Griffin’s Citadel Investment Group was the largest shareholder with ownership of 13.8 million shares valued at $155 million.
2. IDEXX Laboratories, Inc. (NASDAQ:IDXX)
Number of Hedge Fund Holders: 48
Westbrook, Maine-based IDEXX Laboratories, Inc. (NASDAQ:IDXX) is a global leader in veterinary diagnostics, software, and water microbiology testing with a history that dates back to 1983. It employs nearly 11,000 people and offers solutions and products to customers in more than 175 countries and territories.
On November 1, IDEXX Laboratories, Inc. (NASDAQ:IDXX) released its financial results for Q3 2023. Its revenues increased by 9% y-o-y to $916 million, while its net income increased by 17% y-o-y to $212 million. It generated a normalized EPS of $2.53, which exceeded consensus estimates by $0.16.
As of Q3 2023, 48 of the 910 elite hedge funds tracked by Insider Monkey held IDEXX Laboratories, Inc. (NASDAQ:IDXX) shares, valued at $2.3 billion. Terry Smith’s Fundsmith LLP was its largest hedge fund shareholder with ownership of 3.0 million shares valued at $1.3 billion.
In its Q2 2023 Baron Asset Fund investor letter, Baron Funds, an investment management company, made the following comments about IDEXX Laboratories, Inc. (NASDAQ:IDXX):
“We retain conviction in IDEXX’s long-term opportunity. The company’s competitive position remains outstanding. We expect new proprietary product innovations and field sales force expansion to be meaningful contributors to growth in 2024. We see increasing evidence that secular trends around pet ownership and pet care spending have been structurally accelerated, which should help support IDEXX’s growth rate over the long term.”
1. Zoetis Inc. (NYSE:ZTS)
Number of Hedge Fund Holders: 56
Parsippany, New Jersey-based Zoetis Inc. (NYSE:ZTS) is a leading animal health company with a portfolio and pipeline of medicines, vaccines, diagnostics, and technologies offered in over 100 countries. Formerly a subsidiary of Pfizer Inc. (NYSE:PFE), the company became independent through a spinoff in 2013.
Zoetis Inc. (NYSE:ZTS) has been continuously making efforts to increase its product franchises in major markets. During the third quarter, the company received approvals for Simparica Trio, the company’s triple combination oral parasiticide for dogs, in Australia and Canada. The company launched Librela (bedinvetmab injection for osteoarthritis pain) and Apoquel Chewable (oclacitinib chewable tablet) in the U.S. in October.
Zoetis Inc. (NYSE:ZTS) has paid regular dividends since its spinoff from Pfizer Inc. (NYSE:PFE) with consecutive dividend increases for several years. The board of directors of the company increased the dividend rate by 15% in December 2022 to bring the quarterly dividend payment to $0.375. Its dividends have grown at a CAGR of 22.63% during the last 10 years.
Zoetis Inc. (NYSE:ZTS) ranks first on our list of best pet stocks to buy now. The shares of the company were owned by 56 hedge funds with a total value of $1.4 billion according to the Insider Monkey database. Rajiv Jain’s GQG Partners was the largest hedge fund shareholder with ownership of 1.8 million shares valued at $318 million.
You may also like to read 13 Best Growth Stocks To Buy According To George Soros and 11 Best Young Stocks to Buy and Hold For 20 Years
