The Edge Singapore examines 25 globally listed pet-themed stocks that are likely accessible to Singapore investors, with the exception of Pet Center Comercio e Participacoes. Table 1 shows the list of 25 pet-themed stocks along with their market capitalisation, listed exchange, and brief description.
From the list, we scored and ranked the stocks based on a few financial metrics, as shown in Table 2. The metrics used are as follows:
• The first metric is historical performance, which considers historical years of increasing revenue, profits, operating cash flow (OCF), free cash flow (FCF) and dividends paid, along with the consistency of these figures.
• The second metric analyses the growth in price versus the growth in weighted value over multiple periods. The weighted value growth is comprised of revenue, net profits, OCF and FCF in order of increasing weights. A company that has its price growth more than its value growth is deemed overvalued, and the converse applies.
See also: Petico’s strategic move to acquire Perromart
• The third metric studies the profitability of the company, focusing on margins, return on equity and return on assets.
• The fourth metric is yields and relative valuation, which compares the fundamental yields such as operating income and dividends against the risk-free-rate and also against peers to determine its attractiveness financially.
• The fifth metric examines the financial safety of a company, particularly the liquidity and solvency ratios, along with the retained earnings section of the balance sheet.
See also: Malaysian pet food retailer Petico acquires Perromart’s assets
• The last metric is sentiment, which looks at analyst sentiment on the stock and the consensus target price.
Based on the scoring table, the company that is most undervalued is Tokyo-listed Anicom Holdings, and we think investors looking to diversify their portfolio industry sector-wise may consider this stock, along with other high-scoring pet stocks for further examination and analysis.
