Shares of veterinary diagnostics leader IDEXX Laboratories, Inc. (NASDAQ:IDXX) detracted from performance. While financial results were strong, unfavorable weather in Europe and depressed global milk prices temporarily reduced reported growth. We estimate that just 1% to 2% of IDEXX’s profit is exposed to milk prices, and we believe that weather trends in Europe have normalized. We believe that competitive trends are outstanding in IDEXX’s core companion animal business, highlighted by instrument installed base growth of 20%, domestic lab growth more than twice that of its main competitor, and improving sales productivity. We expect new proprietary innovations and ongoing sales force expansion to contribute to growth over time.
From Ron Baron (Trades, Portfolio)'s fourth-quarter 2018 Baron Growth Fund shareholder letter.
