Investors have long considered the healthcare sector to be a safer bet in bear markets. The assumption is that, even during bad times, people will still need healthcare services.

PetMed Express (PETS)

Daily Chart with 50- and 200-day Moving Average

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Healthcare services for pets is an interesting angle. PetMed Express, Inc. (NASD:PETS) is a pet pharmacy doing business as 1-800-PetMeds. This company has been outperforming in these tough market conditions and recently announced earnings:

• PetMed Q2 tops expectations, shares rise 8 pct
  In a conference call with analysts, Chief Executive Menderes Akdag said PetMed had acquired about 239,000 new customers in the the second quarter ended Sept. 30, adding that the current economic downturn has had no impact so far.

Perhaps pet owners are searching for better, cheaper deals on medical supplies. Jim Cramer did an interesting segment on Wal-Mart entering the pet supplies industry. He was very bearish on PetSmart, Inc. (NASD:PETM):

• Sell Block: Pet Cemetery
  PetSmart (PETM), the one-stop shop for all things pet -– from food to veterinary care -– is going to be under enormous pressure as Wal-Mart (WMT) sets up a shop of its own on the former’s turf. The outcome, if history is any guide, will not be good for PetSmart.

Will Cramer’s concerns about WMT entering this business affect PETS? That’s the question for investors.