Zoetis Inc (ZTS-N)

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.

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.

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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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.

Companion pets are a big thing. Growing need for protein from livestock. Above 200-day MA, but that's moving sideways. Trendlines are not fantastic. Trading at 31x, with 10% growth rate, PEG of 3, a bit expensive.

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.

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

A bit disappointing. Headwind from near-term, cyclical pressures as economy weakens and vet visits decline. Company sees itself as defensive -- people prioritize their pets, aging population, younger generation having pets instead of children. Competition on drugs, adverse press to dog pain management drug. Still likes longer, secular trend.

2/3 pet pharma, 1/3 livestock. Time to market is lower than for human pharma, not as much generic competition. Overhang from negative press about unwanted effects from painkillers -- anecdotal, not based on data. Good growth going forward. Yield is 1%.

Livestock has come back since Covid plus, as people become wealthier, they eat more protein. Pet side is going like gangbusters. Lots of products in pipeline. Incredible run during Covid, now taking a break. Will continue to do well.

Pet division is about 2/3 of revenue, livestock makes up the rest. Around for 65 years, spun off from PFE 10 years ago. Animal health industry has very little generic competition, so product life tends to be over 25 years. Leading share globally. Invests in R&D. Pullback is attractive opportunity. Yield is 1%.