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3/8/2015

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Bill Ackman Is Keeping On Buying Zoetis


February 24, 2015 | About: ZTS -1.46%

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.
TheExtraIncome

Articles (27)
Author's Website

He is an activist investor. He buys the common stocks of public

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the values of the companies. Ackman buys stocks trading at a

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companies, and pushes for changes so that the market can realize
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 $M and is engaged in the discovery,
development, manufacture and commercialization of animal health medicines and
vaccines, with a focus on both livestock and companion animals. It markets products
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across four regions: the United States, Europe/Africa/Middle East, Canada/Latin America
and Asia/Pacific; eight core species: the livestock species of cattle, swine, poultry, sheep
and fish, and the companion animal species of dogs, cats and horses; and five product
categories: anti-infectives - products that prevent, kill or slow the growth of bacteria, fungi or
protozoa; vaccines - biological preparations that help prevent diseases of the respiratory,
gastrointestinal and reproductive tracts or induce a specific immune response;
parasiticides - products that prevent or eliminate external and internal parasites such as
fleas, ticks and worms; medicated feed additives; and other pharmaceutical products pain and sedation, oncology, antiemetic, allergy and dermatology; and reproductive
products.
He started to buy it on Q3 of 2014 when he bought 5,536,862 shares at an average price of
34$. 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%.
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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

P/E (ttm)

40.40

47.00

P/B

16.63

3.70

ROE

63.79

6.74

ROA

10.84

3.79

ROC

39.67

14.01

Price

Profitability

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%

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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%

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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%.

Also check out:


Bill Ackman Undervalued Stocks
Bill Ackman Top Growth Companies
Bill Ackman High Yield stocks, and
Stocks that Bill Ackman keeps buying

About the author:


TheExtraIncome
You can read about me on my blog http://theextraincome.blogspot.it .
It talks about stocks, and is pretty new :D

Visit TheExtraIncome's Website

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