Don’t Buy Petco’s IPO — Buy This ETF Instead
Editor’s Note: Our team will be taking a well-deserved break during the holiday. We will be sending you a special note on Thursday and a card from all of us on Friday.
We will be back to our regular publishing schedule after the new year. Next week, you’ll see some of our favorite articles from 2020. Plus, we have a brand-new sweepstakes just for our readers. Stay tuned for all of the details.
In the meantime, read on to hear how our writer Nicole has been spending part of her 2020. — Annie Stevenson, Managing Editor, American Investor Today
“You want to adopt both of them?” The foster coordinator looked at me and my husband in disbelief.
We’d decided to take in a pair of hound-mix puppies from a local rescue until they were able to find permanent homes. About a month in, we came to the realization that we couldn’t bear to give them up. We wanted to adopt them ourselves.
And now, right as a pandemic was threatening to shut everything down, we decided it was the perfect time to make things official.
After all, as the dog person that I am, the only thing in my mind that could’ve been better than adopting a puppy … was adopting two. And I’m so glad we did.
Fast-forward to today, and I can’t imagine my home without Beau and Basil.
Without them to keep me company, I’m not sure how I would’ve gotten through the stressful and isolating time 2020 has been.
As any pet parent knows, our furry companions can do a great deal of good for us. Studies have shown that dogs not only relieve stress, but offer emotional support to owners, ultimately promoting better mental health.
Yes, my puppies are a handful.
Yes, they choose to bark, wrestle or climb into my lap every time I’m on a Zoom call.
But I wouldn’t want it any other way … because they’re part of the family.
And it seems that many Americans this year are feeling the same about their own pets.
In fact, it’s being reflected in the major pet industry boom we’re seeing right now…
1 Retailer That’s Going Public
With shelters, rescues, breeders and pet stores across the country reporting more demand for pets than there were animals to fill it this year, it’s no wonder that this industry is soaring.
E-commerce pet retailer Chewy, for example, just reported impressive third-quarter growth — adding 1.2 million active users — and a jump in net sales.
And just this month, popular pet retailer Petco has filed to go public.
With the number of pet-owning households expected to rise 4% this year, the company is projecting an extra $4 billion in potential demand for the products it carries.
Personally, I’ve spent quite a bit at my local Petco since adopting Beau and Basil. Collars, leashes, bowls, crates, toys … you name it, we bought it. And, as is the case with many teething puppies, we ended up having to buy most of those items a second time as well.
And with Petco’s sales up by $290 million year over year as of October, it’s clear that I’m not the only one…
How We Can Profit as Alpha Investors
As Alpha Investors, we look to profit from mega trends in thriving industries.
And while pet care is a strong industry with a major tail wind behind it, we don’t know who will be the winner of the boom. We can’t tell you if it’ll be Petco, Chewy or some other big-name retailer.
However, there’s another way to profit from the pet care trend … and that’s with e-commerce.
The shift to e-commerce has been accelerated this year as a result of COVID-19 and the shutdowns that followed. In nine months, we’ve experienced the kind of shift that might’ve — under normal circumstances — taken nine years!
So, while we don’t know who will win the pet care industry, we do know that e-commerce will be a winner in the post-pandemic world.
And rather than trying to pick just one stock in this sphere, we’re recommending the Vanguard Information Technology Index Fund (NYSE: VGT).
We’ve talked about this exchange-traded fund (ETF) before, it’s one of our favorites. It holds several companies in the internet and e-commerce space (allowing for easy diversification).
Although this ETF doesn’t include pet care companies, it does hold the payments companies that help e-commerce retailers — like Chewy, for example — run. These include popular payment companies like PayPal Holdings Inc. (Nasdaq: PYPL) and Square Inc. (NYSE: SQ).
Bottom line: If you want to profit, e-commerce is the way to go.
And we, at American Investor Today, hope to find more profitable opportunities like it for you in the coming year.
P.S. We’ve been interested in e-commerce for a long time. It’s one of the massive trends that Wall Street veteran Charles Mizrahi has pinpointed in his Alpha Investor newsletter. And this month, he’s found another one. It’s so significant, he thinks it’s less of a mega trend … and more of a universal truth. How can you profit? Click here to find out.