Stock of the day 03/06/2015 – Pets at Home Group PLC

Since its IPO back in March, Pets at Home has run the gamut of market performance; the company announces its full year earnings on Thursday (04/06/2015).

After opening its first day of trading at £2.48 Pet at Home quickly fell to £2.38, and this downward trend continued for the majority of its abbreviated 2014. By the middle of October the stock had hit a low of £1.67 following 6 months of fairly uninterrupted declines. However, the news at the end of October that sales in stores open for longer than a year had grown by 4.2% in that same period got investors sniffing around the stock once more, and by the first half of November Pets at Home was trading in the £1.98-£2.00 trading bracket that it would hover around for the final 2 months of the year.


(Source: IT-Finance.com 03/06/2015)

If 2014 was a disappointment, then 2015 has been anything but. From the 20th January to the 6th February the stock grew from £1.98.5 to £2.28 (its highest price since the end of its first month of trading back at the start of April 2014) inspired by a trading statement that highlighted third quarter revenue growth of 7.8% to £182.2 million. This sustained Pets at Home until the end of March, when a ‘buy’ rating from Liberum Capital pushed the stock to £2.52.

News last month that between April 2014 and September 2014 group revenues increased by 10.2% further inspired investor confidence in the stock, helping Pets at Home continue its upward trend and hit a fresh high of £2.86 during Wednesday. It is currently trading at £2.82 (03/06/2015, IT-Finance.com).

Some of the recent success Pets at Home has seen is in regards to the increasing presence of both its grooming services and its in-store veterinary practices. Luckily for investors, the company has pledged that it is going to implement an aggressive expansion programme in these areas. With pet superstores currently accounting for around 9% of UK pet care, there is plenty of room to grow this figure further, especially if Pets at Home commits a significant amount of its focus to the task.

Pets at Home currently has a consensus rating of ‘hold’ (7 ‘holds’, 5 ‘buys’, 2 ‘sells’) with an average target price of £2.28.

Wednesday’s stock news:

The real estate investment trust Workspace Group was one of the big winners this Wednesday as it gained over 6.5% after posting a very impressive full year trading statement. Workspace saw a 43% increase in pre-tax profits to £360 million alongside a 13% raise in its yearly dividend to 12.04p. The news that the company had acquired Angel House in London was the cherry on top, and helped pushed Workspace to fresh record highs.

WH Smith had a similarly robust day, growing by around 4% following its first sales increase for 6 years. Just. As has been the trend of late, it was the company’s ‘travel’ sector, i.e. stores in airports and train stations, that has driven growth, posting a like-for-like sales increase of 8% against a 4% sales drop from its high street stores. This managed to leave a 1% increase in group like-for-like sales, and enough good news to please investors.