4-Star Stocks Poised to Pop: PetSmart

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Based on the aggregated intelligence of 180,000-plus investors participating in Motley Fool CAPS, the Fool's free investing community, pet food and products retailer PetSmart (NAS: PETM) has earned a respected four-star ranking.

With that in mind, let's take a closer look at PetSmart's business and see what CAPS investors are saying about the stock right now.

PetSmart facts

Headquarters (Founded)Phoenix (1986)
Market Cap$5.77 billion
IndustrySpecialty stores
Trailing-12-Month Revenue$5.99 billion
ManagementCEO Robert Moran (since 2009)
CFO Lawrence Molloy (since 2007)
Return on Equity (Average, Past 3 Years)20.4%
Cash/Debt$291 million / $564 million
Dividend Yield1.1%

Sources: S&P Capital IQ and Motley Fool CAPS.

On CAPS, 94% of the 692 members who have rated PetSmart believe the stock will outperform the S&P 500 going forward. These bulls include dreamjob and Nalakensho.  

Earlier this month, dreamjob tapped PetSmart as a stock worth fetching:

Growing [free cash flow] -- check. ... Improving sales and earnings -- check. Selling below intrinsic value calcuations -- check. Strong name brand and customer recognition (check). Looks good!

Over the next five years, in fact, PetSmart is expected to grow its bottom line at a solid rate of 16% annually. That's faster than pet-product-selling retail giant foes Costco (13%), Target (11%), and Wal-Mart (10%).

CAPS member Nalakensho expands on the PetSmart outperform argument:

What can I say, this is my puppy's pick. We get everything she needs from this store. Pet lovers treat their pets like family. The variety of services cover most of your pet's needs ... one stop shopping. Most people will continue to provide for their pet even as the economy slows.

What do you think about PetSmart, or any other stock for that matter? If you want to retire rich, you need to put together the best portfolio you can. Owning exceptional stocks is a surefire way to secure your financial future, and on Motley Fool CAPS, thousands of investors are working every day to find them. CAPS is 100% free, so get started!

Want to see how well (or not so well) the stocks in this series are performing? Follow the newTrackPoisedToCAPS account.

At the time this article was published Fool contributor Brian Pacampara owns no position in any of the companies mentioned. Motley Fool newsletter services have recommended buying shares of PetSmart, Costco, and Wal-Mart, as well as creating a diagonal call position in Wal-Mart. The Motley Fool owns shares of Costco and Wal-Mart. Try any of our Foolish newsletter services free for 30 days.We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Fool's disclosure policy always gets a perfect score.

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