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Animal Magnetism – MWI Veterinary Supply, Inc.
Posted by: Dr. Paul Price (IP Logged)
Date: December 17, 2008 01:07PM

MWI Veterinary [NDQ:MWIV] - Dec. 17 price: $22.80 (11:45 AM)
52-week range: $20.16 (Nov. 21, 2008) - $45.11 (Sep. 22, 2008)


MWI Veterinary Supply is a major distributor of animal health products to veterinarians throughout the United States and Canada. Their product lines include drugs, vaccines, capital equipment, pet foods, nutritional supplements, parasiticides and diagnostics. They serve both the commercial agricultural market and the family pet segments of the industry.

This is a relatively recession-proof business. Medical professionals will order and use the supplies and equipment needed to treat their patients regardless of economic conditions. This is especially true in the commercial agricultural end of the business where the health of the animals is imperative to the well being of the business. While the typical pet owner might defer some routine treatment for their beloved dog or cat it is unlikely they will skimp on necessary care for illness or injury.

MWI came public in August 2005 and each year since (FYs end Sep. 30) has shown all-time highs in sales, cash flow, earnings and book value. The company is virtually debt free with just $0.2 MM in total debt versus almost $13 MM in cash assets on their balance sheet.

Here are their per share numbers as reported by Value Line for all their publicly traded years:

FY …...…… Sales …..… C/F …...… EPS …..… B/V …........ Avg. P/E
2005 …….. 46.96 …… 0.58 …..… 0.68 ….… 8.20 …......… 32.7x
2006 …….. 52.49 …… 1.37 …..… 1.25 ….…11.22 ........… 24.1x
2007 …….. 59.06 …… 1.61 …..… 1.40 …....13.31 …....... 25.3x
2008 …….. 68.71 …… 1.87 …..… 1.62 ….…14.95 …........ 21.6x

From FY 2005 through FY 2008 revenues grew by 46.3%, cash flow increased by 222.4%, book value improved by 82.3% and EPS surged by 138%. This was accomplished through acquisition of smaller distributors on top of organic growth. Over the three years net profit margins expanded from 0.6% to 2.36% in the year just completed in September.

The consensus estimates for FY 2009 and FY 2010 are now $1.79 and $2.05 per share despite the slow economic conditions.

Shares have sold off significantly today without any apparent news to account for the drop. The company reaffirmed its FY 2009 expectations for $1.75 - $1.85 in earnings per share and $900 - $950 in gross revenues.

I’m using today’s share price drop of around 20% to accumulate shares in this fine growth company while the valuation is the lowest ever. At $22.80 MWIV trades for just 14.1x last year’s and 12.7x calendar year 2009’s EPS versus previous average P/Es between 21x – 32x.

Even 18 times current FY expectations of $1.79 lead me to a $32.22 target price or plus 41% from the present price.

Is that possible? Sure. These shares peaked at $38.61, $44.60 and $45.11 in 2006-2007-2008 and fundamentals are much better now than ever before. In fact, the 52-week high of $45.11 was hit this past September - less than three months ago.


Disclosure: Author bought shares of MWIV earlier today.


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Re: Animal Magnetism – MWI Veterinary Supply, Inc.
Posted by: Dr. Paul Price (IP Logged)
Date: February 4, 2009 05:05PM

MWI Veterinary Supply Announces 2009 First Quarter Results and Reaffirms Its 2009 Business Outlook

Shares close at $27.16 + $5.39 + 24.76%


Veterinary Supply, Inc. (NASDAQ: MWIV) (the "Company") announced financial results today for its first quarter ended December 31, 2008.

Highlights:


-- Revenues were $231.8 million for the quarter, 14.0% higher than
revenues for the same period in the prior fiscal year.

-- Net income was $5.9 million for the quarter, 26.6% higher than net
income for the same period in the prior fiscal year. Diluted earnings per
share were $0.48 for the quarter, compared to $0.38 for the same period in
the prior fiscal year.

-- Selling, general and administrative ("SG&A") expenses as a percentage
of revenues were 10.0% for the quarter, compared to 10.5% for the same
period in the prior fiscal year.

-- Internet sales to independent veterinary practices and producers grew
by approximately 42% for the quarter compared to the same period in the
prior fiscal year. Our product sales from the internet as a percentage of
sales improved to 27% for the quarter as compared to 24% for the same
period in the prior fiscal year.

-- We doubled the capacity of our Dallas distribution center by moving to
a larger facility with 70,000 square feet in November 2008.

-- We completed the quarter with no borrowings on our $70 million credit
line and a cash balance of $786,000.

"While the environment is more challenging, the MWI team again delivered great operating results in the December quarter," said Jim Cleary, President and Chief Executive Officer. "We had 14% growth in revenues, 26% growth in net income, 42% growth in internet sales, and we finished the quarter with excellent liquidity and no borrowings on our $70 million credit line."


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Re: Animal Magnetism – MWI Veterinary Supply, Inc.
Posted by: newhigh (IP Logged)
Date: February 5, 2009 10:29AM



If I really knew about markets, I'd be living in St Tropez, not the hovel that I currently call home. Now that I have qualified myself, let me explain my (ill-founded?) cynicism...The Chief Financial Officer dumped a large parcel of shares back in Oct 2008. Does she know something we dont? Maybe it will show in the accounts later down the track. Also, I cannot see any other insiders buying this stock. Furthermore, the 10 year historical ROE trend is not entirely abysmal but it does not inspire confidence.



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Re: Animal Magnetism – MWI Veterinary Supply, Inc.
Posted by: Dr. Paul Price (IP Logged)
Date: February 5, 2009 07:40PM

Newhigh,

The last 9 insider sells were all done at $40 /share and higher.
I would be a seller at those levels too.

This stock was recommended here at $22.80 /share last Decemeber 17th.


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Re: Animal Magnetism – MWI Veterinary Supply, Inc.
Posted by: Dr. Paul Price (IP Logged)
Date: May 5, 2009 08:19PM


MWI Veterinary Supply Inc (MWIV)

By Bill Wilton
May 05, 2009

From ZACKS...

MWI Veterinary Supply, Inc. (MWIV) continues to climb following its most recent earnings release.

Company Description:

MWI Veterinary Supply is a leading distributor of animal health products to veterinarians across the United States of America. Products MWI sells include pharmaceuticals, vaccines, parasiticides, diagnostics, capital equipment, supplies, veterinary pet food and nutritional products. The company markets these products to veterinarians in both the companion animal and production animal markets.

32% Increase in Net Income

MWI announced second-quarter results on Apr 30 that included net income of $5.8 million, 32% higher than the same quarter last year. Revenues jumped 10% to $215 million.

Internet sales continue to grow, 36% this quarter, and are now 31% of total sales, up from 27% one year ago. Earnings per share were 47 cents, up from 36 cents last year and beat the consensus estimate by 10 cents.

The company has beat expectations in 4 of the past 5 quarters, with the remaining quarter meeting estimates.

Updated Guidance:

Management updated revenue guidance to between $910 million and $925 million, a 9% to 11% year-over-year increase. Earnings per share are expected to be $1.80 to $1.85, after raising the bottom of the range by 5 cents.

Full-year estimates for 2010 are currently averaging $2.02. If the midpoint of the companies guidance is reached, as well as the 2010 consensus, year-over-year growth will be 13% in 2009 and 10% in 2010.


Shares of MWIV have surged since the April earnings release. The stock is has been gaining steadily since early February.





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Re: Animal Magnetism – MWI Veterinary Supply, Inc.
Posted by: newhigh (IP Logged)
Date: January 28, 2013 09:36AM

Mea Culpa. The passage of time has proven me to be totally wrong and Paul Price totally right.

With the benefit of hindsight, it appears that the CFO who unloaded her shares at around $40 was totally delusional.

I was equally delusional for not buying this stock.......but its too late now - at over $110 a share, its clearly not cheap any longer.


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