Pelican Bay Capital Management, LLC on Zoetis
Thesis
Pelican Bay added to Zoetis after a sharp post-earnings sell-off because it believes the market reaction was excessive relative to the long-term opportunity. The manager expects animal-health spending to rise and sees Zoetis's product pipeline supporting high single-digit sales growth for years to come. The position is contrarian because near-term weakness in legacy dermatology and parasite products is being weighed against a longer-term pipeline and industry-growth thesis. P(1) Pelican Bay Capital Manage…
“we continue to believe that animal health spending will increase and that Zoetis is well positioned with a strong product pipeline”
Key risks
- Legacy dermatology and parasite products are losing share to lower-priced competition
- Macroeconomic pressure may keep pet owners focused on reducing veterinary spending