PetMed Express Inc.: A Small Cap With 30%+ Upside Potential
- PETS has underperformed the market, but appears to be good value at a P/E of 15.40 and a dividend yield of 4.87%.
- The company is in a strong financial position, but needs to get on the offense to grow and survive.
- PETS is an attractive takeover target, and we believe the presence of an activist investor could unlock value.
- Based on our valuation, we expect at least 30% upside if ROE can be maintained.
- This investment could backfire if management does not think long term.