I was strolling down my street the other day and saw a couple walking their dog… in a stroller.
Yup, that’s right. They were pushing a small, probably three-pound Yorkshire Terrier in a tiny pink baby carriage that looked like it was made for one of my daughter’s old dolls.
And it dawned on me… people love their pets. Like, really love them.
People throw their dogs birthday parties, dress their cats in Halloween costumes – I even know a family that buys McDonalds cheeseburgers for their toy poodle. Social media is littered with accounts dedicated to people’s pets, some with tens of thousands of followers.
According to a study by the American Pet Products Association (APPA), Americans spent a total of $72.56 billion on their pets in 2018 – the most in history.
Whenever that much money is pouring into one industry, it’s clear that there is a massive opportunity at play.
This is the best way to cash in on the billion-dollar and growing pet industry…
What 1-800 Pets’ Earnings Report Means for Your Bank Account
For proof of the country’s growing obsession with their pets, you can just take a look at the recent earnings report from Petmed Express Inc. (NASDAQ: PETS)…
Also known as 1-800-PetMeds, the online pet pharmacy beat Wall Street’s expectations on Monday, October 21, after three straight quarters of misses. And the stock rose a whopping 37% in just one day on the news.
There is one key aspect of the online pet pharmacy that allowed for this success, and it’s right there in one, single word – online.
We’ve spent a lot of time talking about the “retail revolution.” More and more people are turning to their computers, rather than stores, for their retail needs. And now, those needs are growing to include meds for their pets as well.
In the past, pet drug manufacturers have relied on veterinarians to prescribe drugs. Therefore, they would only supply medicine to pharmacies at vet practices. And drugs for animals is a huge industry. In the APPA’s aforementioned study, the second-biggest source of spending was veterinary care, after only food. That means pet owners paid a massive total of $18.11 billion on medical care for their animals last year.
But people no longer have to take their pets to the vet in order to get the medicine they need. Drug makers are finally changing their practice, and supplying meds directly to online retailers like PETS.
In the past, these online retailers had to rely on excess inventories from vets for their meds, resulting in just a small supply of the drugs in the highest demand. Now that they can receive supply directly from the drug manufacturer, however, everything is changing.
Companies like PETS finally have the supply they need to meet their demand. And they are becoming strong competition for more well-known companies like Chewy Inc. (NYSE: CHWY), the online pet retailer that went public back in June.
CHWY may have a had a big, flashy IPO last summer. But over the course of September, CHWY stock lost 26%. And it’s struggling to stay afloat…
PETS, however, is a different story. Shares gapped up big on its latest earnings announcement, and its $69.94 million in quarterly revenue – above estimates of $69.65 million – is a clear sign of more growth to come.
This is a serious cash opportunity that you don’t want to miss.
Think about it. A 37% jump in just one day is a huge leap. But if you own a call option instead, you can reap even bigger gains…
When trading around an earnings report, I typically suggest buying a long-term call option. This way, you can avoid the risks that come with earnings while allowing time for even bigger profits.
Take Coca-Cola Co. (NYSE: KO), for example. My readers bought a January 2020 call option on January 2, 2019. They held this option for six months, through a couple of earnings reports, before selling it on July 23, 2019 for a 106.02% gain!
You see, even a longer-term option on a stock that jumps 37% is likely to double in value – and still have time for continued profits.
Because sure, a 37% profit is nice. But 100% is even better.
What other companies are on your radar this earnings season? Head on over to the Network and let me know! Need a login? Click here now to learn how to get your username and password.
America’s #1 Pattern Trader