Bottom line now that they got PETBARN they own the market leader...

Bottom line now that they got PETBARN they own the market leader in the Country - the brand name is worth ALOT - in fact Petbarn is waaaaay ahead of the pack in terms of branding. No pet store brand even comes close...
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Again its a demand Inelastic company; PETBARN brand will ensure Earnings Stability rather than earnings volatility - your dealing with a Buffet Style BRAND NAME.

If the management can manage the takeover and growth strategy correctly, youll be the shareholder in a company with stable returns even in recessions.

In this type of market leader/strong brand name companys, the ROE/ROA can be at the lower end of Buffet seal of approval bcoz theyre near Monopolies in terms of market share Or theyre sooooooo far ahead in terms of Branf Recognition....

Look at the Projected Figures for 2015 and 2016 once the growth strategy kicks in....

Return on asset of 6-7% atm dsnt reflect the takeover growth strategy in the future; Projected Earnings are slated to Skyrocket in 2016; Hence the ROA ex cash will look more Buffet quality; In 2015 u can assume a cash flow of say 30mill and the next yea 2016 of say 45-50mill which lands an ROA in 8% buffet territory

If the Management manages this growth strategy well, you've got a buffet company with the only well known brand and no competition even close with eventual ROA of 8% buffet style on debt plus equity

That's why the PE is 20 now and 15 in 2016; Its worth paying 15 times earnings for such a strong Brand Presence