This past year was a big year for myself and my partner, not only did we purchase our first home we also welcomed a fur baby into the family.
As a new ‘fur parent’ I have become familiar with the big yellow pet stores that are scattered around Australia – commonly known as Greencross Limited (ASX: GXL) to us investors.
According to the Greencross website, Greencross is Australasia’s largest integrated pet care company, with over 250 pet specialty retail stores or vet clinics in Australia and New Zealand. In any market brand awareness is an important commodity and Greencross has this in spades – think how many times you have passed a Greencross Vet, Petbarn or City Farmers.
However, in 2018 Greencross responded to market whispers that there was private equity interest in their company.
This presented an opportunity to reflect on my holdings and think if I really wanted to be a long-term shareholder of Greencross. Upon careful consideration, I decided to exit my position in Greencross and redirect my money to other investment. Here are my reasons why:
- Like many retailers, Greencross is prone to the threat of online shopping and the convenience it brings. An example of this is technology giant Amazon has recently introduced a line of pet care products. In my experience when Amazon enters a market it tends to win and win big.
- The Australian & New Zealand pet care market is relatively small when compared to its US and European relatives, with any new entrance having the potential to cause rapid price drops and thinning out of customers. With this in mind, ASX-listed National Veterinary Care (ASX: NVL) was founded by ex-Greencross executives and has been purchasing privately owned clinics across Australia’s eastern seaboard. Competition is great for me as the consumer (cheaper products) but not so great for me as the investor.
Private Equity coming to town was welcomed news for existing shareholders as the share price jumped on the news. However, as the competitors come into the market my reason for holding quickly disappeared and I decided to free up capital and invest in other company.
After searching through a market with over 2,000 shares, our lead expert investment analyst has narrowed it down to just 2 of his favourite rapid-growth shares in a FREE report to Rask Media readers.
Over the past five years, these two shares have gone from being 'tiny caps' to being serious contenders for the ASX 200.
Idea #1 is taking on the world, starting with the huge USA market. In a just a few short years the company has snatched market share away from rivals and is on its way to being the market leader.
Idea #2 uses a 'printer and cartridge' type model to get large and established customers: a) using their healthcare industry-leading product, b) paying for it again and again and again... so it's little wonder this company is tipped to grow at a rapid pace in 2019.
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Disclaimer: Any information contained in this article is limited to general financial/investment advice only. The information has not taken into account your specific needs, goals or objectives, so please consider consulting a licenced and trusted adviser before acting on the information. Please read The Rask Group’s Financial Services Guide (FSG) for more information. This article is authorised by Owen Raszkiewicz of The Rask Group, which is a corporate authorised representative No. 1264179 of Strawman Pty Ltd (ACN: 610 908 211) (AFSL: 501 223).