Pets at Home share price falls sharply in 2022

As a quick reminder, Pets at Home is a leading pet care business. It currently has over 450 locations in the UK as well as an online presence. Pet owners are able to buy everything they need to look after their beloved pets, including food, toys, bedding, as well as grooming and veterinary services.

So what’s happening with Pets shares currently? Well, as I write, they’re trading for 323p. At this time last year, the stock was trading for 488p, which is a 33% drop over a 12-month period. The share price has fallen sharply since the beginning of 2022, which is when macroeconomic headwinds and geopolitical issues affected stock markets worldwide.

Risks to note

The biggest risk Pets at Home faces currently is soaring inflation, the rising cost of materials, as well as global supply chain issues. The rising cost of materials has an impact on its costs, which could squeeze profit margins. This then has an impact on performance, returns, and investor sentiment. Supply chain issues could also lead to operational problems and impact sales too. I do view this is a shorter-term risk, however.

Despite Pets at Home’s well-established brand and dominant market position, increasing competition in the pet care sector is a threat to its investment viability. Other firms are trying to gain market share, which could impact longer-term performance and returns.

Positives and what I would do now

So to the positives. One major factor for me is Pets at Home’s dominant market position, as well as its presence throughout the UK. With many store locations, its online offering, and being one of the top pet care businesses, I believe this position should boost growth, performance, and returns too.

So what about performance? I do understand that past performance is not a guarantee of the future. However, looking back, I can see Pets has a great track record. In fact, in the past four fiscal years, it has grown revenue and profit year on year.

Next, the Pets at Home share price looks decent value for money right now on a price-to-earnings ratio of just 11. As a bonus, the shares would also boost my passive income stream through dividend payments. Its current dividend yield stands at 3.7%. It is worth noting that the FTSE 250 average is just under 2%. I am aware that dividends are never guaranteed and can be cancelled at the discretion of the business, however.

Overall, I believe Pets at Home shares could be a good addition to my holdings. For that reason I would buy the shares and hold on to them for the long term. The fact the pet ownership levels have increased in recent years is a positive for Pets at Home too. Currently, 59% of households in the UK own pets. This means they will need pet care and Pets at Home could benefit from this.

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Jabran Khan has no position in any of the shares mentioned. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors.

The FTSE 250 is in fine form this morning, rising over 1% in early trading. Is this a sign that February might be a little kinder to investors?

Well, no one knows for sure where share prices will go in the near term. As such, I prefer to stick to my strategy of owning great stocks for years rather than weeks. With this in mind, here are two members of the index I’d be happy to buy, whatever happens next. 

Long term theme

Petcare retailer Pets At Home (LSE: PETS) is an example of a great FTSE 250 business that I could see myself holding for the long term. That’s despite its share price falling around 7% in 2022 so far.

A beneficiary of multiple UK lockdowns and the pet boom that accompanied them, the mid-cap continues to release encouraging updates. Group like-for-like revenue increased 8.7% in the 12 weeks to 30 December compared to the same period in 2020. Perhaps more significantly, it was also 28.1% higher than two years ago.  

This isn’t all that surprising. Pets At Home now seems to have every corner covered. In addition to its 455-store retail estate, the company is rapidly growing its online presence (evidenced by the 99% jump in omnichannel revenue on a two-year basis). It also has a burgeoning veterinary services arm, gaining 9,200 new registrations per week on average.

At 20 times forecast earnings, the shares aren’t exactly cheap. However, I can’t see the themes of “long-term pet ownership, humanisation and premiumisation” highlighted by the company disappearing any time soon. Moreover, the company is “firmly on track to report a record year of sales and profit growth”, according to soon-to-depart CEO Peter Pritchard. It also has net cash of £77m on its balance sheet. 

My only slight concern right now, aside from the need to replace its leader, is the extent to which inflationary pressures might impact the company going forward. They certainly won’t go away overnight. Then again, that’s true for all sorts of businesses. 

I’d be comfortable buying Pets At Home today but I’d back up the truck if the share price continues to fall over 2022.

Another solid FTSE 250 stock

Kitchen supplier Howden Joinery (LSE: HWDN) is another FTSE 250 stock that benefited from the three UK lockdowns. A hot housing market may have also contributed to what has been something of a purple patch for the near-£5bn-cap business. Like Pets at Home, however, the shares have lost a bit of momentum in 2022 so far. As I type, they’re down 12%.

Howdens is down to report its latest set of full-year numbers (covering the vast majority of 2021) later this month. Given that the company only recently stated that pre-tax profit should be “at the top end of analyst forecasts“, I can’t see its value tumbling from here.

Of course, I may be completely wrong. Now that we look to be coming to the end of the pandemic, there’s a possibility that more existing holders may look to bank some profit. After all, kitchens aren’t something that people replace every year.

Still, a P/E of 17 doesn’t exactly scream ‘overvalued’ when I consider Howden’s solid margins, strong brand, consistently high returns on capital and sizeable market share. So, even if the company does struggle to repeat 2021’s performance, I’m confident that this would still be a worthy addition to my quality-focused portfolio.

The post FTSE 250: 2 growth stocks I’d buy and hold for years appeared first on The Twelfth Magpie.

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Paul Summers has no position in any of the shares mentioned. The Motley Fool UK has recommended Howden Joinery Group. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors.

“Strong revenue growth“

As one of the biggest vets businesses in the UK, it’s not surprising that business at CVS has boomed the last year or so. Positively, it would seem that this trading momentum has been particularly evident over the last couple of months. “Strong revenue growth” was achieved in May and June, according to the company.

As far as actual numbers were concerned, like-for-like sales growth for the financial year to the end of June came in at 17.4%. This was clearly far better than the meagre 0.7% achieved last year. Then again, like so many other businesses, CVS Group was massively affected by the introduction of Covid-19 restrictions. 

The firm now expects to report EBITDA (earnings before interest, tax, depreciation, and amortisation) “marginally ahead” of what analysts were expecting. 

But can all this last?

I think this can last. Although we now appear to be coming to the final few chapters of the pandemic, all those new pet dogs, cats, and iguanas will need regular checkups for many years afterward. This demand should provide some support to the CVS share price going forward.

In another sign of just how much the trading environment has improved, CVS said today that it now employs roughly 10% more vets compared to this time last year. It’s also advertising for new positions and planning to continue its acquisition-friendly strategy by snapping up independent practices. That sounds pretty bullish to me!

Buyer beware

If all this sounds like I think the shares of CVS can only go way, let me clear: I think there are still risks to investing here.

One I’ve already mentioned is the possibility of profit-taking in the months ahead. ‘Running your winners’ is a rule of thumb that I endorse. However, there will come a time when some long-term holders will want to move on. After all, the shares have climbed 116% over the last year. Anyone buying when this growth stock dipped to a low of 433p back in February 2019 would have a gain of over 400% by now.

At 31 times FY22 earnings, the valuation undoubtedly reflects this. One needs to remember that CVS isn’t the only veterinary services provider out there. So, while there may be more pet owners these days, it’s clear the company can’t rest on its laurels. Client numbers must keep rising.

Ongoing recruitment also has implications for the mid-cap’s bottom line. A shortage of vets and support staff will mean that CVS needs to make its pay and perks more attractive to get the best talent.

Defensive growth stock

So long as I were comfortable with the drawbacks of investing in CVS right now, I’d buy this defensive growth stock today. Regardless of what happens next in the economy, people won’t stop spending cash on their furry (and not so furry) companions. To me, that makes for a compelling investment. 

The post This UK growth stock is rocketing. Is there still time to buy? appeared first on The Twelfth Magpie.

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Paul Summers has no position in any of the shares mentioned. The Motley Fool UK has no position in any of the shares mentioned. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors.

FTSE 250 winner

It didn’t require a crystal ball to know that today’s results from pet products retailer Pets At Home (LSE: PETS) were going to be impressive. Despite the disruption caused by the pandemic, the huge demand for furry (and not so furry) companions over multiple UK lockdowns was a clear boon to the company.

Total revenue grew 7.9% to just over £1.14bn for the year to 25 March. Unsurprisingly, the vast majority of this came from the firm’s retail arm. Here, sales rose 8.7% to top £1bn for the first time.

Elsewhere, the company’s veterinary division also played its part with revenue climbing 1.6% over the year. Like-for-like revenue growth came in at 7.9%. 

Things get a little more complicated when we get to the bottom line. While the £87.5m of underlying pre-tax profit was ahead of expectations, it still came in 6.4% lower than the previous year. However, this is after roughly £30m of Covid-related costs and the repayment of almost £29m of business rates relief are taken into account. 

The good news didn’t stop there.

Strong outlook

According to the FTSE 250 member, the “strong momentum” seen in the previous financial year has continued into the new one. As such, Pets predicts that underlying pre-tax profit in FY22 will come in between £120m and £130m. 

Of course, there are still risks. The potential for new variants of the coronavirus to impact on daily life can’t be dismissed, even if Pets believes it will be able to respond to its customers “with minimal disruption“. As confident as it is of also growing market share and becoming “the best pet care business in the world“, one needs to keep things in perspective. Pet care remains a highly competitive industry. If the company does have an economic moat, it’s most certainly a narrow one. 

The fact that the share price hasn’t jumped today also implies that a lot of good news is already priced in. This may bring forth a wave of temporary profit-taking in the near-term. 

Defensive market

Despite these potential drawbacks, it’s hard to see how Pets won’t benefit from the strong growth drivers within this industry. The estimated 8% increase in ownership over the pandemic, coupled with the non-discretionary nature of spending on pets and growth in loyalty club registrations and subscriptions, suggests new investors like me could still do well over the medium term.

On top of this, PETS finances are in good order. It had net cash of £1.4m by the end of the last financial year.  Strong free cash flow also allowed it to increase the total dividend by 7% to 8p per share. This gives a trailing yield of 1.7% at today’s share price. That won’t be of much interest to income investors. However, it is another indication of just how confident the company is on trading going forward.

The Pets at Home share price has climbed 91% over the last year. Based on today’s positive statement, I think there’s more upside ahead. So, as hard as it can be to buy a stock that’s already very popular, I’d be happy to add this FTSE 250 stock to my portfolio today. 

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Paul Summers has no position in any of the shares mentioned. The Motley Fool UK has no position in any of the shares mentioned. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors.

The rising Pets at Home share price

I’ve previously discussed this business. But as a quick reminder, Pets at Home is a provider of pet supplies and veterinary services. It operates a network of over 450 physical locations offering more than 9,600 products. These items include toys, food, and kennels, among others. With more than half of its stores equipped with an on-site veterinary practice, the company has become the largest UK branded network of first-opinion clinics.

The pandemic brought about many societal changes. The most prominent of these was the shift towards working from home. As a result, many individuals decided to expand their family with the addition of a pet. In fact, according to the latest statistics published by the Pet Food Manufacturer’s Association (PFMA), the level of pet population exploded in 2020. Some 3.2m households have acquired a pet since the start of the pandemic. This is undoubtedly excellent news for the business. And while it has yet to publish its full-year results, a recent trading update revealed that the management team expects pre-tax underlying profits to be around £85m.

Comparing this figure to the previous year, it remains flat. But let’s not forget it also includes the £28.9m repayment of business rates relief and is significantly ahead of the original £77m estimate. Ignoring this one-time expense, the underlying profit increased by an impressive 32%. So, I’m not surprised that the Pets at Home share price is surging. 

A potentially serious threat

The pet services industry is highly fragmented. But while the level of competition is high, I’m more concerned about the supply structure of this business. Its supply chain crosses international borders. This is not uncommon but does expose the firm to multiple currencies and thus foreign exchange risks. But my primary concern is how it distributes its products once they are in the UK.

The company only has two distribution centres to supply the north and south regions of the country. But as unlikely as it may be, the entire supply chain can be interrupted for a significant portion of its stores if one of these facilities suffers disruptions. As products begin to run out, customers may start questioning the reliability of the firm and then potentially switch to one of its many competitors.

The bottom line

Despite these risks, I believe that Pets at Home is worthy of being included in my portfolio, even after its recent share price appreciation. I think it’s fair to say that once the pandemic is over, the growth in the pet population will likely slow. But that doesn’t change the fact that all the acquired animals last year will still need care, food, and entertainment. Therefore I believe the Pets at Home share price has plenty more room for growth. I’d consider it for my portfolio.

The post Can the Pets at Home (PETS) share price continue to climb? appeared first on The Twelfth Magpie.

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Zaven Boyrazian does not own shares in Pets at Home. The Motley Fool UK has no position in any of the shares mentioned. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors.

The level of the pet population in the UK has skyrocketed in 2020. At the start of the year, a survey by the Pet Food Manufacturer’s Association revealed that 2.1m people added a new pet to the family, with another 1.8m people intending to do so in the near future.

I previously explored CVS Group as a potential investment to profit from this rising trend. But can this alternative UK stock also thrive? Let’s take a look.

Best growth stocks to buy now?

Pets at Home Group (LSE:PETS) is a leading provider of pet supplies and veterinary services. It sells over 9,600 products, such as food, toys, litter, and kennels, across more than 450 physical stores around the UK. What’s more, around half of these locations are equipped with veterinary practices to compliment the business’s non-retail side. As a result, the company has the largest branded network of first-opinion clinics in the UK.

Its retail stores generate almost 90% of total revenue, with more than half of that from pet food sales alone. And despite Covid-19 related restrictions, revenue has continued to grow by 17.5%.

The business appears to have a high level of customer loyalty that has only been solidified by its VIP membership programme. Customers can enjoy discounts, both in-store and online. At the same time, the stock leverages its customer data to drive even more sales. At the end of 2020, VIP membership grew by 26% to more than 6.2m customers. Combining that with the double-digit revenue growth makes me believe that this growth strategy is working.

UK stock investing is never risk-free

The firm only sells its products and services within the UK. But it operates with a global supply chain, meaning that the costs of doing business often involves international currencies. This subsequently exposes the firm to foreign exchange rate risks.

Another potential threat I spotted relates to its distribution centres. It only has two of them, serving the north and south side of the country. While unlikely, if a disaster were to occur at only one of these sites, the vast majority of its stores and clinics will lose their access to their supplies. Needless to say, that would create significant disruption within the business.

Bottom line: should I buy this growth stock?

With the vaccine rollout underway, the pandemic will hopefully soon come to an end. And as people return to work, the growth in the pet population will likely begin to slow. At least that’s what I think.

But even with a slowdown, the newly acquired pets aren’t going to disappear overnight. After all, a pet is for life. These animals all need feeding, entertainment, and healthcare. Something that Pets at Home appears perfectly positioned to provide.

With that in mind, the business definitely looks like it could be one of the best growth stocks to buy and add to my portfolio.

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Zaven Boyrazian does not own shares in Pets at Home Group. The Motley Fool UK has no position in any of the shares mentioned. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors.

Today, I’m looking at two solid growth stocks that should contribute to this ongoing rally. As luck would have it, both also reported to the market this morning. 

FTSE 250 flyer

As stock market sentiment improves, online investment platform AJ Bell (LSE: AJB) has welcomed yet more customers over the final three months of 2020. The number of people using its services moved 6% higher in the quarter, bringing the total to a little over 312,000 — a 30% rise over 2020.

Total net inflows also jumped 100% to £1.6bn and total assets under administration climbed 11% in the quarter to £65.2bn. 

As good as these numbers are, shares in AJ Bell were pretty much flat in early trading. This would suggest the market had already priced in today’s news. That’s not altogether surprising when you consider the stock has already climbed nearly 90% since last March’s market crash. The fact AJB was trading at 50 times forecast earnings before today’s statement may also have deterred would-be investors. 

Is that valuation too rich? Possibly. If 2021 proves to be tougher than expected, it’s likely highly-priced UK companies will be hit the hardest. 

Then again, there’s little doubt that AJ Bell is a quality business. It consistently generates great returns on capital and sky-high operating margins. It’s also got a shedload of cash on its balance sheet. Valued at less than £2bn, the company has a lot more room to grow than its near-£8bn-cap FTSE 100 peer Hargreaves Lansdown.

As things stand, I’m more than happy to continue holding and will look to add on any weakness. 

Resilient earnings

Another share supporting the FTSE 250’s recovery over recent months has been pet product retailer and veterinary services provider Pets At Home (LSE: PETS). Like AJ Bell, I suspect the shares will continue to reward investors long after the coronavirus storm has passed.

Today’s Q3 trading update — covering the 12 weeks to the end of 2020 — showed total revenue had grown 18% to £302m. Based on this performance, Pets maintained its previous guidance and expects to generate “at least £77m” in pre-tax profit for the full financial year.

And the shares? Like AJ Bell, Pets at Home has been in great form. Those investing at the depths of the coronavirus crash would have doubled their money. The question is whether there’s more to come in 2021. 

Naturally, nothing rises in a straight line and there may be some profit-taking in the weeks ahead. An undeniably punchy valuation of 32 times forecast earnings may also lead some growth-focused investors to refrain from loading up on the stock for now. 

Notwithstanding this, I struggle to see why the share price won’t continue to rise over time. After all, spending on furry companions tends to remain resilient, even in tough economic times. What’s more, the boom in pet ownership over the pandemic should mean the FTSE 250 member continues to attract and retain customers through its membership and subscription services.

Factor in the possible rollout of new stores inside the M25 and further gains in 2021 certainly aren’t out of the question.

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Paul Summers owns shares of AJB. The Motley Fool UK has no position in any of the shares mentioned. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors.

Those who had the fortitude to buy a stake in the business back in mid-March would now be sitting on a gain of close to 80%! Is there still time for new investors to get on board? Here’s my take. 

FTSE 250 winner! 

Back in July, the company reported sales across all parts of its business had bounced back following the easing of lockdown and “normalisation of shopping habits.” The fact procedures at its veterinary operations could now be performed also contributed.

Today, Pets announced the momentum seen in all its channels since reopening in Q1 had continued. As a result of achieving “double-digit” growth in like-for-like sales, management now believes underlying pre-tax profit for the full year (ending late May 2021) will come in “ahead of current market expectations.“

As updates go, I’m not sure existing holders could ask for anything more.

But is it still worth buying?

Given what’s going on in the world and the general nervousness seen in markets, speculating whether this company is worth buying now, however, is tricky.

Shares in Pets At Home were already trading on 27 times earnings before today. That’s expensive for any stock, let alone a retailer. It’s also a mighty price to pay considering the threat of further restrictions due to the spike in coronavirus cases.

As the company itself remarked today: “Covid-19 continues to create a number of material uncertainties around the trading environment, including the risk of a second lockdown.”

Should that second lockdown come, it’s possible we could see a second stock market crash in 2020. If this happens, there’s certainly the potential for the Pets share price to be hammered along with everything else.

After all, highly valued companies will often be the first to be jettisoned from portfolios. Moreover, panicked investors will usually look to sell what they can (i.e liquid FTSE 250 stocks), not what they should.

Resilient sector

For me, ascertaining whether Pet At Home is a great buy really involves asking how long you plan to hold it for. Based on the points above, I’d be tempted to at least pause before reaching for that ‘buy’ button, if it’s only for a few months. These holding periods are for traders, not investors.

That said, those thinking of holding for years rather than months could still do well. As the company itself stated, one of the attractions of the pet care market is its “inherent resilience.” These days, we consider pets as family members and spending on our furry friends has become less discretionary.

Like veterinary services provider CVS Group, I think Pets At Home is a great way of tapping into this trend. Let’s not forget there has also been a boom in pet ownership this year as a consequence of lockdowns. All those new owners will need to shop somewhere. 

No investment is free of risk. For those willing to buy and hold, however, I think this FTSE 250 stock could be a great addition to most portfolios. Just be sure to be sufficiently diversified elsewhere first.

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Paul Summers has no position in any of the shares mentioned. The Motley Fool UK has no position in any of the shares mentioned. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors.

Pets bounces back

Total and like-for-like revenue fell 1% and 0.7% respectively over the period from 27 March to 16 July. However, this doesn’t tell the whole story.

In the first eight weeks, like-for-like revenue growth tumbled 13.5%, only to bounce back by 12% in the second eight weeks. In other words, Pets was hit hard, had done well to recover, and was “emerging as a stronger business“.

Broken down, retail like-for-like revenue increased 0.4% on decent sales of merchandise. This helped cushion the blow of needing to shut down its grooming salons and the sale of pets during the period. During the quarter, Pets also trialled new initiatives, including a “Call and Deliver-to-Car” service and home delivery of medication.

Unsurprisingly, omnichannel revenues soared 71% on record order volumes, prompting Pets to announce that it had signed a conditional lease agreement for the construction of a new storage and distribution facility; the idea being that it will then be able to manage its online orders and retail stores from one site.

As if this wasn’t enough good news, Pets at Home also reported on “heightened demand for pet ownership“, evidenced by the growth in members of its VIP service (+20.3%) over the period. The number of subscription customers also rose 18.1% in the quarter to just over 900,000. 

The only slight negative from today was that like-for-like revenue from its veterinary business fell (by 9.3%) as restrictions on procedures came into force. Nothing revelatory there.  

So, more gains to come?

Not necessarily, at least in the near-term. While recent momentum had been ahead of expectations, even Pets said that it would be wrong to assume that trading would continue like this for the rest of the year.

All perfectly prudent, in my view. After all, we have no idea how long social distancing restrictions will go on for. There’s also the possibility of more local lockdowns and even, worst-case scenario, one that extends to the whole country. 

While many rushed to buy a puppy for lockdown, there’s also no certainty that the rise in pet ownership will be sustained. Indeed, a jump in unemployment may mean that buying a furry friend will become less of a priority for many would-be owners.

That said, the fact that Pets was able to use its designation as an ‘essential’ retailer to stay open during lockdown allowed it to gain “valuable insight into consumer behaviour and preferences“. This should serve it well if we’re all sent back to our homes again. It should also make it easier (though not easy) for the company to estimate costs, at least compared to other businesses. 

In the meantime, Pets looks pretty sound financially. It ended the quarter with a total of £267m in cash and undrawn banking facilities.

Solid buy

All told, I think today’s news and the fact that it’s got its paws in so many non-discretionary spending pies underline the solid case for investing in Pets At Home. 

A forecast price-to-earnings ratio of 24 before this morning looks high. However, a bounce-back in earnings in FY22 should bring the valuation back down. 

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Paul Summers has no position in any of the shares mentioned. The Motley Fool UK has no position in any of the shares mentioned. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors.

By sharp contrast, the valuations of some UK companies have bounced to such an extent that March appears as a mere blip on their respective charts. 

Here are three examples that caught my eye.

Pets at Home

Due to “exceptional levels of demand” from pet owners over the last few weeks, retailer Pets at Home (LSE: PETS) has outperformed. Underlying pre-tax profit for the full year is expected to come in “slightly above the top end of the range of current market expectations.” As such, it’s probably no surprise its share price has galloped back to where it was only a few weeks ago. 

Can this positive momentum continue? It’s a tricky one. Having already closed its grooming salons, Pets now expects lower revenue from its vet practices and stores as people only make a trip if absolutely necessary.

Given the company has reported customers “pulling forward purchases,” you have to consider the possibility many owners have already stockpiled enough food for their furry friends should the lockdown be extended.

With no guidance for the next financial year issued, it’s understandable if prospective investors are still reluctant to buy. Nevertheless, the defensive nature of its industry surely makes Pets a far safer bet than other stocks in the FTSE 250. 

CMC Markets

Online trading provider CMC Markets (LSE: CMCX) is another firm that’s seen its share price recover. Actually, that’s something of an understatement. It’s now higher than before the coronavirus pandemic struck. 

This all feels very logical, given CMC benefits from periods of market volatility. Indeed, recent numbers suggest business is booming. More clients are signing up to use its platform (or logging back in). So the small-cap now expects full-year trading revenue from its main CFD business to be around £214m. This is almost double what it generated in FY19.

Markets are likely to remain jittery for the foreseeable future. But I think those buying now could still make decent gains. Having said it would retain its policy of paying out 50% of post-tax profit to its shareholders, CMC looks a relatively safe bet for income investors too.

Bioventix

Last, but not least, we have antibody developer and supplier Bioventix (LSE: BVXP). While unrelated to the current crisis, last week’s set of interim results helped explain why its share price has now returned to levels seen in February. 

Revenue and pre-tax profit jumped 21% and 31% respectively over the six months to the end of December. In addition to this, Bioventix saw fit to raise its interim dividend by a cracking 20%, to 36p per share.

The near-term outlook was also reassuring. A reduction in some diagnostic testing might impact earnings. But Bioventix expects to continue supplying antibodies to customers in countries affected by Covid-19. This makes sense given that healthcare services have now been prioritised.

The only slight concern for me is the company’s small workforce (16 people). This could become stretched if government guidelines on how companies should operate are modified. 

The post What market crash? These 3 growth stocks have bounced back hard appeared first on The Twelfth Magpie.

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Paul Summers has no position in any of the shares mentioned. The Motley Fool UK has recommended Bioventix. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors.