PETSMART INC. $81 - Nasdaq symbol PETM

PETSMART INC. $81 (Nasdaq symbol PETM; Aggressive Growth Portfolio, Consumer sector; Shares outstanding: 99.4 million; Market cap: $8.1 billion; Price-to-sales ratio: 1.2; Dividend yield: 1.0%; TSINetwork Rating: Above Average; www.petm.com) has accepted an $83.00-a-share takeover offer from a group of private firms.

The purchase price works out to a 159.4% gain since we first recommended PetSmart at $32 in our October 2007 issue.

The buyers aim to complete the takeover in the first half of 2015. Investors should hold their shares and tender them to avoid paying brokerage fees.

Investors often ask how we have managed to recommend so many stocks that get taken over.

One key is that we aim to pick stocks with hidden value that attracts less investor attention than it deserves. That not only gives buyers a bargain, but it cuts the risk of crippling losses. It also attracts takeover bids.

Our #1 stock pick for 2015

We’ll announce our #1 pick for 2015 in the February 2015 issue, which will go out on January 30, 2015.

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Pat McKeough

A professional investment analyst for more than 30 years, Pat has developed a stock-selection technique that has proven reliable in both bull and bear markets. His proprietary ValuVesting System™ focuses on stocks that provide exceptional quality at relatively low prices. Many savvy investors and industry leaders consider it the most powerful stock-picking method ever created.

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One of the sweetest and most profitable pleasures of successful investing is to buy high-quality “value stocks” (or stocks that are reasonably priced, if not cheap, in relation to its sales, earnings or assets), then hold on to them as mainstream investors recognize the value and push up the share price.

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