When you see stocks explode upward and they aren't related to technology, you immediately have to do some digging. I got lucky yesterday, as The Clorox Company (CLX) was one of the stocks that roared, finishing up seven points, and I had the CEO on Mad Money. The other stock that was up similarly, Zoetis (ZTS) , the animal health company, is another company I pay close attention to. Like Benno Dorer, the CEO of Clorox, Zoetis' CEO Juan Ramón Alaix also comes on Mad Money.
What shocked me when I dug down is what stood out as the biggest growers in its panoply of products: new products for companion animals. Now, the humanization of pets has been a continual theme of Mad Money for ages. The evolution of pets from being in the basement, to the bedroom to the bed itself has been ongoing. The sheer numbers -- 44% of all households have dogs and 35% have a cat -- are staggering, as is the fact that there are 78 million dogs and 85 million cats in those households to feed, take care of and pamper.
When you look at the make-up of the earnings for Zoetis, you find that while there is a consistent livestock business, it's the companion animal growth, particularly the anti-itch franchise, that is driving the 12% growth at the company. The new pet products, particularly Cytopoint, a novel anti-itch medicine, could actually reach blockbuster status. The pipe's got an oral active ingredient that works against fleas, ticks and mites as well as internal parasites like heartworm.
The stock's up 26% and has almost tripled since two years ago. It's a quiet, $44 billion stock that gets virtually no promotion.
Clorox? You know it as a bleach company but I know it as a cost cutter with innovation. Its standout product this year? Clean Paws, with a double-digit growth that's taking cat pet owners by storm because it deals with a very specific issue that drives cat masters crazy: litter that gets stuck on the paws of cats as they exit the litter box. Cats are clean freaks but they can't do anything about this messy problem. So Clorox invented something that solves the concern.
These two stories come on the heels of one of the most remarkable stocks of the era: Idexx Labs (IDXX) . Here's a triple in less than two and a half years -- and it's deserving because of some breakthrough anti-itch products for dogs and a line of diagnostics for vets that has generated some startling results. It has not been unnoticed, as Zoetis entered the category this very week with the closing of its Abaxis vet point of care acquisition.
Idexx's Jonathan Ayers first introduced me to the humanization theory, and he then schooled me on the wonders of the cash business that is a veterinary practice. His knowledge of the industry is unparalleled.
And if that isn't enough, Eli Lilly (LLY) disclosed this week that it was going to IPO its Elanco division, which looks to be the second coming of Zoetis. We owned Lilly for Action Alerts Plus, and told club members to look out for Elanco. We didn't hold on for the Elanco pop, because Lilly has been a terrible performer on earnings day. But because of Elanco and a very good set of new drugs, it did not disappoint and went sky high. I'm sure Elanco will be a good one.
Right now, we seem to be in a tug of war between China and no China, or FANG and no FANG. It just might pay to think of other themes that have neither dichotomy going against them. The humanization of pets may be the top dog out there.