Guru Bill Ackman (Trades, Portfolio) and founder of Pershing Square Capital Management LP slashed his position in Zoetis Inc. (ZTS, Financial) on May 9.
Zoetis has a market cap of $22.85 billion, a P/E ratio of 69.59, an enterprise value of $26.67 billion, a P/B ratio of 19.64 and a dividend yield of 0.77.
Zoetis is a global animal health company that was originally founded in 1952. The company discovers, develops, manufactures and commercializes a diverse portfolio of animal health medicines and vaccines.
Zoetis works on vaccines for cattle, swine, poultry, sheep, fish, dogs, cats and horses. The company has five product categories that include anti-infectives (products that prevent, kill or slow the growth of bacteria, fungi or protozoa), vaccines (biological preparations that help prevent diseases of the respiratory, gastrointestinal and reproductive tracts or induce a specific immune response), parasiticides (products that prevent or eliminate external and internal parasites such as fleas, ticks and worms), medicated feed additives and other pharmaceutical products (pain and sedation, oncology, antiemetic, allergy and dermatology) and reproductive products.
Zoetis is also traded in Germany.
According to GuruFocus Zoetis has three medium warning signs that may have influenced Ackman to reduce his stake by 16,850,000 shares. Zoetis' price of $46.97 is close to its five-year high of $50.24. Zoetis has been issuing new debt that creates a higher variance, a more stressful situation for any company. Over the previous three years, the company has issued $717 million of new debt. The company's P/S ratio is 4.86, which is close to the five-year high of 5.25.
Ackman may have also decided to reduce his position in Zoetis because the company financials have struggled over the previous 12 months. Zoetis has seen decreases in EBITDA (-13.2%), EPS without NRI growth (-35.60%), free cash flow growth (-18.40%) and book value growth (-8.30%).
It is noteworthy that other gurus such as George Soros (Trades, Portfolio), Vanguard Health Care Fund, Steven Cohen (Trades, Portfolio), Pioneer Investments, Paul Tudor Jones (Trades, Portfolio), Ruane Cunniff (Trades, Portfolio) and Mario Gabelli (Trades, Portfolio) either reduced their positions or sold out of the company in the first quarter.
Below is a Peter Lynch Chart for Zoetis.
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