In morning trade the Greencross Limited (ASX: GXL) share price has climbed 3% higher to reach a two-month high of $5.81.
Despite this solid gain, though, the integrated pet care company's shares are down almost 19% since this time last year.
Why are its shares higher today?
This morning Greencross held its annual general meeting and released its accompanying presentation to the market.
While there was no market sensitive news within the presentation, investors appear pleased that the company has had a solid start to the year despite the weak retail environment.
Management advised that trading during the first 16 weeks of FY 2018 is in line with expectations. Total sales are up 8.5% and like-for-like sales growth is at 4.4% on the prior corresponding period.
Furthermore, so far in FY 2018 the company has opened 5 stores, 4 in-store clinics, and 4 grooming salons. Management expects to add a total of 15 stores and 20 in-store clinics to the network in FY 2018.
Should you invest?
At present Greencross' shares are changing hands at an undemanding 15x trailing earnings. Further, they provide a fully franked trailing 3.3% dividend.
I believe this is great value, especially considering its sales growth thus far in FY 2018.
If margins stay firm, or even improve, and this sales growth is sustained, then I feel confident that Greencross will deliver earnings growth that justifies a rerating of its shares.
In light of this I would class Greencross as a buy, alongside industry peer National Veterinary Care Ltd (ASX: NVL).
