On December 31, 2024, Hotchkis & Wiley executed a strategic transaction involving PetMed Express Inc (PETS, Financial), reducing its holdings by 116,600 shares. This move represents a 10.69% decrease in the firm's position in the company. Despite this reduction, Hotchkis & Wiley still holds 974,103 shares, maintaining a 4.70% stake in PetMed Express Inc. The transaction was executed at a trade price of $4.82 per share, and the stock now constitutes 0.02% of the firm's portfolio. This decision reflects the firm's ongoing evaluation of its investment strategies and market conditions.

Hotchkis & Wiley: A Profile of Value Investing

Established in Los Angeles in 1980, Hotchkis & Wiley is a prominent investment firm known for its focus on undervalued companies with significant potential for appreciation. The firm adheres to a value investing philosophy, emphasizing key investment parameters such as tangible assets, sustainable cash flow, and the potential for business performance improvement. With a diverse portfolio, Hotchkis & Wiley's top holdings include companies like Telefonaktiebolaget L M Ericsson (ERIC, Financial) and $Citigroup Inc(C-N)$ (C, Financial), primarily in the Financial Services and Technology sectors.

PetMed Express Inc: A Nationwide Pet Pharmacy

Founded in 1997, PetMed Express Inc operates as a nationwide pet pharmacy in the USA. The company specializes in marketing prescription and non-prescription pet medications and health products directly to consumers. With a current market capitalization of $87.79 million and a stock price of $4.25, PetMed Express Inc is considered significantly undervalued. The company's [GF-Score](https://www.gurufocus.com/term/gf-score/PETS) is 69/100, indicating poor future performance potential. Despite this, the stock's [GF Value](https://www.gurufocus.com/term/gf-value/PETS) of $10.57 suggests a Price to GF Value ratio of 0.40, highlighting its undervaluation.

Financial Metrics and Growth Indicators

PetMed Express Inc has experienced a 3-year revenue growth decline of 3.00%, with a [Growth Rank](https://www.gurufocus.com/term/rank-growth/PETS) of 472. The company's [Profitability Rank](https://www.gurufocus.com/term/rank-profitability/PETS) is 7/10, and it maintains a [Financial Strength](https://www.gurufocus.com/term/rank-balancesheet/PETS) rank of 8/10. The [Altman Z score](https://www.gurufocus.com/term/zscore/PETS) of 3.81 indicates a relatively stable financial position. However, the stock has seen an 11.83% decline in price since the transaction, reflecting market volatility and investor sentiment.

Impact of the Transaction

The reduction in Hotchkis & Wiley's stake in PetMed Express Inc had no significant impact on the firm's overall portfolio, maintaining a 0.02% position in the company. The decision to reduce holdings aligns with the firm's value investing strategy, focusing on optimizing its portfolio for long-term growth and stability. Despite the stock's recent decline, Hotchkis & Wiley continues to hold a substantial position, indicating confidence in the company's potential for future appreciation.

Conclusion

Hotchkis & Wiley's decision to reduce its stake in PetMed Express Inc is consistent with its value investing philosophy, which emphasizes tangible assets and sustainable cash flow. The firm's top holdings remain concentrated in sectors such as Financial Services and Technology, with significant investments in companies like Telefonaktiebolaget L M Ericsson and Citigroup Inc. As the market continues to evolve, Hotchkis & Wiley's strategic adjustments reflect its commitment to maximizing returns for its investors while navigating the complexities of the financial landscape.

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