Stan Wong Zoetis Inc ZTS-N DON'T BUY Oct 10, 2024

Shares are declining because they now face competition. It's no longer a one-horse race.

Likes the industry in general. A leader. Vets like its products. Not a lot of generic competition. Diversified in types of care. Studies show that pet spending is resilient even during slowdowns. Attractive entry point.

Librela's actually been on the market for a while, launched in Europe before US. Debate whether it helps or does it cause adverse effects. Company still tags very strong growth for this drug, vets are still recommending it. Reports in a week or two, so we'll get more visibility. If growth stalls on this one, a negative for the stock. So far, things seem on track.

Librela is important, as company thinks it can be a blockbuster. Their other drugs are doing quite well, pipeline is healthy.

ZTS looks 'decent' with good growth expected still and a reasonable valuation. Sales and earnings are expected to show growth over the next two years. We think it is buyable and would prefer it to the much smaller and riskier PAHC. 
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Animal healthcare is attractive longer term. Tends to trade at a higher multiple. Parasiticides have done very well. Pain medication for dogs has come under debate; vet community still supports it and sees lots of growth in that area. She'd buy here.

Is buying Quanta Services, involved in data centres which is an ongoing trend. She sold Zoetis to fund part of this buy. Zoetis is not exposed to Medicare, which is good, but the stock was not performing that well. Pet care is a good business, but the market wasn't rewarding this stock.