Shares of veterinary diagnostics leader IDEXX Laboratories, Inc. (IDXX, Financial) detracted from performance as investors rotated out of high-multiple veterinary health care stocks. In addition, a potential new lab competitor raised investor concerns. We retain conviction as competitive trends are outstanding, highlighted by instrument installed base growth of 18%, domestic lab growth more than twice its primary competitor, and improving sales productivity. Margins are moving significantly higher, and we believe they could approach 30% over the next several years.
From Ron Baron (Trades, Portfolio)'s Baron Partners Fund fourth-quarter 2019 shareholder letter.
