Animals are very loved, but exorbitant in care, I often tell me. And the property of pets is growing. So FTSE 250 reliable Animals at home (LSE: Animals) may seem like an obvious way to operate this long -term trend as an investor.

But on the stock exchange it is not always so uncomplicated. The fact that the area of ​​economic activity seems promising does not necessarily mean that all companies operating in it will be fine.

Animals at home have noted an boost in share prices by 26% over the past year. There is now a 56% discount at the height of 2021, when closed Labrador lovers gave their companions.

This means that FTSE 250 is now trading in price to profit of 12, which does not sound very high. It also offers 5.8% dividend performance, well above average 3.3% for FTSE 250.

Could it be participation?

Strong brand, continuous development opportunities

Let’s start from the basics of the company. The market is gigantic and seems lucrative. Last year, pets had a profit margin before taxing 8%. It was an improvement compared to the previous year and in my opinion it is quite decent.

The revenues were basically flat, but at 1.5 billion pounds it was significant enough to take advantage of the economy of the scale. The seller has over 8 million members in his club Pets.

Thanks to the forceful brand and the gigantic base of customers who are still coming back, I think that pets have an attractive business.

I was surprised by the decline in revenues on the company’s retail side. This can show a continuous risk of growing digital competition. But this compensated for a forceful boost in revenues in the company’s veterinary industry. It is an area that, I think, can aid drive a long -term growth.

I also see that the veterinarian’s activity has a greater price power than retail activities, because there is usually less price transparency and more urgent when buying veterinarian services than, for example, a package of cat food.

Total debt of 342 million pounds should be convenient to manage for a company with market capitalization 1 billion pounds.

What’s going on?

It seems that there is a lot to like in this FTSE 250 action, so why did he lose over a quarter of his value in just 12 months?

In its latest commercial statement, the company pointed to “Subdued market background without growth on the PET retail market‘

In the current economic climate, I see the risk that pets owners limit expenses on their animals. Perhaps switching to cheaper alternatives for some products.

But the basic needs will still be unchanged and I think that many pets owners will pay for the veterinarian services even in a tender economy. So I am some perspective as a long -term investor.

I believe that the FTSE 250 participation is attractive, a potentially long -term opportunity and I think that investors consider investors.