5 Best Pet Stocks To Buy Now

In this article, we discuss 5 best pet stocks to buy now. If you want to see more stocks in this selection, check out 11 Best Pet Stocks To Buy Now. 

5. Chewy, Inc. (NYSE:CHWY)

Number of Hedge Fund Holders: 25

Chewy, Inc. (NYSE:CHWY) is a Florida-based company engaged in the pure play e-commerce business in the United States. The company provides pet food and treats, pet supplies, pet medications, and other pet-health products. On October 20, Chewy, Inc. (NYSE:CHWY) announced that it is expanding its insurance and wellness offering, CarePlus, using new plans provided by Lemonade’s pet health insurance product app. 

On November 21, Deutsche Bank analyst Lee Horowitz raised the price target on Chewy, Inc. (NYSE:CHWY) to $50 from $40 and kept a Buy rating on the shares ahead of the Q3 results on December 8. CPI data for the pet category rose 14% year-over-year in the third quarter, up from 10% in the prior quarter, indicating “likely strong NSPAC growth for Chewy in the quarter,” the analyst told investors.

According to Insider Monkey’s data, 25 hedge funds were bullish on Chewy, Inc. (NYSE:CHWY) at the end of Q3 2022, with collective stakes worth $303.6 million, compared to 25 funds in the prior quarter worth $288.5 million. Paul Marshall and Ian Wace’s Marshall Wace LLP is the largest stakeholder of the company, with approximately 2 million shares worth $58.2 million. 

Here is what ClearBridge Mid Cap Growth Strategy Fund has to say about Chewy, Inc. (NYSE:CHWY) in its Q2 2022 investor letter:

“We exited our position in Chewy, Inc. (NYSE:CHWY), in the consumer discretionary sector. While we continue to have a favorable opinion of the online pet products retailer, we decided to consolidate our exposure to the pet industry.”

4. Freshpet, Inc. (NASDAQ:FRPT)

Number of Hedge Fund Holders: 26

Freshpet, Inc. (NASDAQ:FRPT) is a New Jersey-based company that manufactures and markets natural fresh meals and treats for dogs and cats in the United States, Canada, and Europe. Freshpet, Inc. (NASDAQ:FRPT)’s Q3 2022 revenue of $151.3 million climbed 40.6% year-over-year, beating Wall Street estimates by $2.98 million. For full-year 2022, the company expects net sales of more than $575 million, an increase of approximately 35% from 2021. Freshpet, Inc. (NASDAQ:FRPT) is one of the best pet stocks to invest in. 

On December 7, Piper Sandler analyst Michael Lavery raised the price target on Freshpet, Inc. (NASDAQ:FRPT) to $88 from $69 and kept an Overweight rating on the shares. The analyst believes Freshpet, Inc. (NASDAQ:FRPT)’s brand equity and product differentiation set it apart in the pet food sector, and he expects a “long runway of strong growth.” Freshpet, Inc. (NASDAQ:FRPT)’s total addressable market is meaningful, and increasing, said the analyst, who expects fresh pet food to continue gaining share.

According to Insider Monkey’s data, 26 hedge funds were long Freshpet, Inc. (NASDAQ:FRPT) at the end of September 2022, compared to 23 funds in the earlier quarter. The collective stakes in Q3 increased to $541.2 million from $184 million in Q2 2022. 

Here is what Wasatch Small Cap Growth Fund has to say about Freshpet, Inc. (NASDAQ:FRPT) in its Q4 2021 investor letter:

“The greatest detractor from Fund performance for the fourth quarter was Freshpet, Inc. (FRPT). The company is the undisputed leader in refrigerated pet food, which we consider a “growth staple.” People seem willing to prioritize the health of their pets under almost any circumstances. Having said that, the stock was down because the company lowered projections for sales and earnings due to rising costs and shortages of labor and materials. Supply-chain challenges have also disrupted Freshpet’s ability to expand manufacturing capacity and get food into stores. Marketing activities have been curtailed because the company is having trouble meeting existing demand. We take some comfort in the fact that Freshpet’s difficulties are supply-related rather than demand related. Over time, we believe that supply-chain challenges will be resolved and that Freshpet will resume its growth trajectory. In terms of competition, there are some smaller players that are trying to challenge Freshpet’s dominant brand name and footprint in stores. But we think those smaller players are even more vulnerable to today’s supply chain challenges. In fact, the current difficult environment may actually strengthen Freshpet’s competitive position and help make the company even more dominant over time. Additionally, we think Freshpet’s pricing power and margins will improve substantially as the company becomes larger.”

3. Elanco Animal Health Incorporated (NYSE:ELAN)

Number of Hedge Fund Holders: 42

Elanco Animal Health Incorporated (NYSE:ELAN) was founded in 1954 and is headquartered in Greenfield, Indiana. It is an animal health company that develops, manufactures, and markets products for pets and farm animals, including parasiticides, vaccines, antibiotics, and nutritional health products. On November 8, Elanco Animal Health Incorporated (NYSE:ELAN) reported a Q3 non-GAAP EPS of $0.20, beating market estimates by $0.04. The revenue of $1.03 billion came in-line with Street consensus. It is one of the best pet stocks to consider. 

On November 14, Piper Sandler analyst David Westenberg maintained a Neutral rating on Elanco Animal Health Incorporated (NYSE:ELAN) but lowered the firm’s price target on the shares to $15 from $21. The analyst updated his model to reflect the Q3 earnings report.

According to Insider Monkey’s data, 42 hedge funds were bullish on Elanco Animal Health Incorporated (NYSE:ELAN) at the end of Q3 2022, compared to 32 funds in the prior quarter. Scott Ferguson’s Sachem Head Capital is the leading position holder in the company, with 28.6 million shares worth $355.3 million. 

2. IDEXX Laboratories, Inc. (NASDAQ:IDXX)

Number of Hedge Fund Holders: 45

IDEXX Laboratories, Inc. (NASDAQ:IDXX) develops, manufactures, and distributes products and services for the companion animal veterinary, livestock and poultry, dairy, and water testing markets worldwide. The company operates through CAG, Water Quality Products, LPD, and Other segments. On November 1, IDEXX Laboratories, Inc. (NASDAQ:IDXX) reported a Q3 non-GAAP EPS of $2.23 and a revenue of $841.66 million, outperforming Wall Street estimates by $0.19 and $11.66 million, respectively. It is one of the best pet stocks to invest in. 

On October 17, JPMorgan analyst Chris Schott reiterated an Overweight rating on IDEXX Laboratories, Inc. (NASDAQ:IDXX) but lowered the price target on the shares to $450 from $525. The analyst said vet visit pressures remain but appear largely well reflected in the valuations of animal health names.

According to Insider Monkey’s third quarter database, 45 hedge funds were long IDEXX Laboratories, Inc. (NASDAQ:IDXX), compared to 40 funds in the prior quarter. Terry Smith’s Fundsmith LLP held the largest stake in the company, consisting of 3.6 million shares worth $1.18 billion. 

Here is what Baron Funds specifically said about IDEXX Laboratories, Inc. (NASDAQ:IDXX) in its Q2 2022 investor letter:

“Shares of veterinary diagnostics leader IDEXX Laboratories, Inc. (NASDAQ:IDXX) fell in the quarter. The broader veterinary industry benefited during the pandemic, as the pet population grew and owners working from home were often more attentive to their pets’ well-being. As the pandemic subsides, IDEXX may be adversely impacted by difficult year-over-year growth comparisons, and the company’s overseas earnings will likely suffer from the strengthening U.S. dollar.

Nevertheless, we believe that the pandemic accelerated the long-term secular trends impacting pet ownership and pet care, and we believe that foreign exchange rates will eventually move in the opposite direction. Furthermore, we believe that IDEXX’s competitive position is the strongest that it has ever been. We further expect the company’s proprietary testing innovations and its field sales force expansion to meaningfully contribute to its long-term growth rate and operating leverage.”

1. Zoetis Inc. (NYSE:ZTS)

Number of Hedge Fund Holders: 62

Zoetis Inc. (NYSE:ZTS) is a New Jersey-based company that develops, manufactures, and commercializes animal health medicines, vaccines, and diagnostic products in the United States and internationally. Zoetis Inc. (NYSE:ZTS) is one of the premier pet stocks to buy now. On November 8, the company said that it will sell $1.35 billion of senior notes, consisting of $600 million of 5.4% senior notes due 2025 and $750 million of 5.6% senior notes due 2032, in an underwritten public offering. Net proceeds will be used to repay the principal of its 3.25% senior notes due 2023 in the aggregate principal amount of $1.35 billion and the rest for general corporate expenses.

On October 17, investment advisory JPMorgan maintained an Overweight rating on Zoetis Inc. (NYSE:ZTS) but lowered the firm’s price target on the shares to $225 from $250. Analyst Chris Schott issued the ratings update. 

According to Insider Monkey’s data, 62 hedge funds were bullish on Zoetis Inc. (NYSE:ZTS) at the end of September 2022, and William Von Mueffling’s Cantillon Capital Management held the biggest stake in the company, comprising 1.85 million shares worth $275.5 million. 

Here is what Baron Health Care Fund has to say about Zoetis Inc. (NYSE:ZTS) in its Q1 2022 investor letter:

“Shares of Zoetis Inc., the global leader in the discovery, development, and manufacturing of companion and farm animal health medicine and vaccines, fell along with shares of other high-multiple 2021 standout performers. We retain conviction as Zoetis recently reported a top and bottom line beat with more than 21% growth driven by dermatology, parasiticides, and recently launched monoclonal osteoarthritic treatments. The company’s 2022 guidance was in line with Street expectations, calling for 9% to 11% operational revenue growth and modest margin expansion despite heavy investment in core growth drivers.”

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