For his "Executive Decision" segment of Mad Money Wednesday night, our own Jim Cramer spoke with Cord Christensen, chairman and CEO of PetIQ Inc. (PETQ) , the pet health care company that's seen 114% revenue growth over the past 12 months. Shares of Pet IQ are up 27% year to date.
Christensen explained that his company is trying to make health care for your pet more accessible. He said 50% of the pets in America still receive no health care services, usually because of cost and convenience. In addition to selling items like flea and tick care through mass market retailers, PETQ also plans to operate 1,000 vet clinics over the next five years. The company provided one-day pop-up clinics at various locations around the country - 74,000 such clinics last year.
Now let's check the charts and indicators.
In this daily bar chart of PETQ, below, we can see a relatively quick rally from May to September where prices rallied from around $18 to $42-$44 in about four short months. The price strength was not long sustained and PETQ corrected lower until late December. Prices made an unimpressive recovery in January and February.
Today PETQ is trading above the rising 50-day moving average line and testing the underside of the rising 200-day line.
The reason I used the phrase "unimpressive recovery" is that volume is missing and the daily On-Balance-Volume (OBV) line has hardly moved the past few months. Buyers were aggressive in May to September but not any more.
The Moving Average Convergence Divergence (MACD) oscillator is not showing much in the way of trend strength.
In this weekly bar chart of PETQ, below, we can see that prices only have a limited history. PETQ is above above the flat 40-week moving average line but volume is also flat and the weekly OBV line is not that encouraging.
The MACD oscillator is below the zero line and could turn up or down from here.
In this Point and Figure chart of PETQ, below, we can see a modest nearby price target of $34.50 being projected. A trade at $31.65 will help the picture.
Bottom line strategy: The fundamentals of PETQ sound promising but the charts do not yet seem to agree.
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