Bill Ackman, co-investment manager for hedge-fund group Gotham Partners LP, formed Pershing Square in November 2003 with $54 million raised from three investors. Ackman got his start in the real estate business, where he worked for his father prior to starting Gotham.
He is an activist investor. He buys the common stocks of public companies, and pushes for changes so that the market can realize the values of the companies. Ackman buys stocks trading at a discount, and sells when the companies reach their appraised value.
Mr. Ackman portfolio has a Total Value of $16,043 Mil with a focus on the Helathcare sector, that represent the 46.4% of stocks.
He has big stakes in Allergn Inc (AGN), Air Products & Chemicals Inc (APD) and Canadian Pacific Railways Ltd (CP) but over the last 4 months he focused his trades buying shares of Zoetis Inc (ZTS).
Zoetis Inc (ZTS) has a Market Cap of 22,850 $M and is engaged in the discovery, development, manufacture and commercialization of animal health medicines and vaccines, with a focus on both livestock and companion animals. It markets products across four regions: the United States, Europe/Africa/Middle East, Canada/Latin America and Asia/Pacific; eight core species: the livestock species of cattle, swine, poultry, sheep and fish, and the companion animal species of dogs, cats and horses; and five product categories: anti-infectives - products that prevent, kill or slow the growth of bacteria, fungi or protozoa; vaccines - biological preparations that help prevent diseases of the respiratory, gastrointestinal and reproductive tracts or induce a specific immune response; parasiticides - products that prevent or eliminate external and internal parasites such as fleas, ticks and worms; medicated feed additives; and other pharmaceutical products - pain and sedation, oncology, antiemetic, allergy and dermatology; and reproductive products.
He started to buy it on Q3 of 2014 when he bought 5,536,862 shares at an average price of 34$. Then on the following quarter (Q4) he heavily increased his stake, buying 36,032,784 shares at $40. Then on (current) first quarter of 2015 he bought (so far) another stake, reaching a total of 41,569,646 shares with an average price of 39$.
The stock is currently trading at $45 with a trailing P/E of 40.40 at its all-time highs but still better then 79% of Global Drug Manufacturers – Specialty & Generic industry competitors.
The P/B ratio is 16.63, higher then 51% of other competitors and against an Industry Median level of 3.70.
At current prices the stock is returning an average gain of 14% to the Bill Ackman (Trades, Portfolio)’s portfolio.
The profitability is rated 7/10 with ROE of 63%, ROA of 10.84% and ROC of 39.67%. These ratios never been so high for the company, and they are also outperforming the industry, being better then 91% of competitors.
Financial Strength is rated 9/10 with a Cash to Debt of 0.16 Vs and Industry Median of 1.48. This ratio is getting lower, while 5 years back the company was out of debts.
Summmarizing the most important ratios :
| ZTS | Industry | |
| Price | ||
| P/E (ttm) | 40.40 | 47.00 |
| P/B | 16.63 | 3.70 |
| Profitability | ||
| ROE | 63.79 | 6.74 |
| ROA | 10.84 | 3.79 |
| ROC | 39.67 | 14.01 |
The company over the last 5 years faced a strong growth in EBITDA (27.30%), EPS (47%) and Free Cash Flow (25%) while Revenue is increased just by 5.90%.
The Book Value got a strong increase during the last 12 months by 60.90%
At current prices the stock looks overpriced by 166% based on both the DCF model and the Peter Lynch Earnings Line.
The company has a yeld of 0.70% with a reasonable payout ratio of 25%. It started to give Dividends on April 2013 and over the last year, the Dividend growth rate is 116.20%
Bill Ackman (Trades, Portfolio) is the main holder of ZTS, holding 8.34% of Outstandig shares. Other Gurus holding are Vanguard Health Care Fund with 1.83%, Top Guru George Soros (0.82%) and Pioneer Investments with 0.44%.
New buyers of ZTS during the last quarter are Steven Cohen that bought 1,718,300 shares and Jim Simons who bought 650,500 shares.
Over the last quarter RS Investment Management reduced its stake of ZTS by 91% and Jean-Marie Eveillard also reduced it by 62%.
