Covetrus, Inc.: Well Positioned To Enjoy Market Crosscurrents

Apr. 30, 2021 11:29 AM ETCovetrus, Inc. (CVET) StockCVET3 Comments
Zach Bristow
4.17K Followers

Summary

  • Covetrus, Inc. remains a compelling investment case, backed by fundamental momentum and market leadership in petcare & veterinary supplies.
  • Recent integration of cloud-based technology into the portfolio permeates a transition to the higher margin software segment.
  • The company is well positioned to benefit from market crosscurrents in US/ex-US veterinary and pet-care markets, with sector tailwinds in each.
  • Balancing the investment debate is unattractive valuations relative to peers and to normalised multiples, with ROIC <0%.
  • Here we cover all of the moving parts in the investment debate for the benefit of investor's own reasoning.
Female veterinarian holding a little dog in her arms
Photo by NickyLloyd/E+ via Getty Images

Investment Thesis

Covetrus Inc. (NASDAQ:CVET) shares remain a compelling investment case following a strong finish to FY2020, amidst other levers to valuation and growth. CVET is well backed by fundamental momentum, and is a market leader in many of its operating domains, including

This article was written by

Zach Bristow
4.17K Followers
Equity strategist (US Equities)Technical focus on fundamental value drivers of business economics to uncover high probability long-term compounders. Seeking to buy at appropriate prices relative to intrinsic worth. Partners are represented over the cross-section of financial markets, from speculators, hedgers, long-term traders and the public. Research covers investment securities and futures & options markets. Shoot me a message to talk trade ideas or portfolio construction. Disclaimer:All research is strictly for informational purposes only. Not to be considered investment advice. Conduct your own due diligence. The Company accepts no responsibility for personal decisions made. Opinions of The Company and its affiliates may change from time to time without prior acknowledgement. The Company and its representatives share no economic relationship with any entities in which it holds common stock investments.

Analyst’s Disclosure:I am/we are long CVET. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

Seeking Alpha's Disclosure: Past performance is no guarantee of future results. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. Any views or opinions expressed above may not reflect those of Seeking Alpha as a whole. Seeking Alpha is not a licensed securities dealer, broker or US investment adviser or investment bank. Our analysts are third party authors that include both professional investors and individual investors who may not be licensed or certified by any institute or regulatory body.

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