Second only to the market for technology, the pet market is booming in ways the rest of the US market for goods and services could only dream of in such an economy as ours lingers at present. Perhaps it’s not the best time, then, to invest in a powerhouse niche others are doubtless already informed of—but I prefer to take the long view on these things.
Though I have no funds available for playing the market, much less the stomach for picking individual winners and losers day trader-style, I have lots of opinions on the trends, issues and companies involved in the world of pet industry dynamics (…and dreams of where I’ll invest my future earnings if I’m ever so fortunate as to amass any wealth).
Bored though you may be by my treatment of this seemingly pet-remote issue, you, too, would do well to pay attention to the details of an industry with the power to impact your pets’ health and well-being (and your pocketbook’s).
Perhaps the more well-heeled among you can even learn to turn an interest/obsession with pets and animal health into a worthy investment opportunity—a pursuit I heartily recommend, as it may well yield dividends in your knowledge base as well as your bank account.
To that end, I’ll detail my favorite companies, large and small, in the pet/veterinary marketplace. It may be just a small sampling but it’ll hopefully whet your appetite for undertaking your own personal investigations. (And maybe you can offer us your own picks in your comments if you have ‘em.)
Biopure: This biotech NASDAQ player was flying to the moon when its Hemopure artificial blood product (for humans) developed a few glitches. At present, we vets still rely on this company for its pet-equivalent product, Oxyglobin. Will they survive on an animal product alone? Don’t think so. But I like their R&D pipeline and their now-low stock price ($0.62 anyone?).
Vetri-Science: No one seems to have a handle on what pet owners and vets really want in their nutritional supplements like Vetri-Science. This booming sector in the “pet pharma” industry knows no bounds, with do-no-harm vitamins and supplements aimed at those of us who would spend reasonable (and sometimes, unreasonable) amounts of our discretionary income for disease prevention and wellness.
Vetri-Science, most famous as the makers of Glycoflex joint supplements, also manufacture a wide range of other supplements. The combination of quality ingredients, packaging and palatability are unparalleled in their industry, IMO.
Nutramax: Also a fave of mine for nutraceuticals (my big growth area in case you couldn’t tell), Nutramax makes excellent products with a great reputation for quality. Cosequin and Denosyl are the ones I use most.
Nutramax boasts a big share of the market which means a whole lot to vets who are loath to switch allegiances, but I do worry that their lack of attention to customer details (like safe and secure packaging) and patient needs (palatability and dosing) might see their market share eroded by the likes of Vetri-Science.
Virbac: Love Virbac products. The way they tailor their shampoos to specific skin conditions makes it easy for me to recommend their well-packaged stuff to almost any patient’s needs. My own dogs couldn’t live without their Ketochlor baths and their dental line has the only highly digestible chlorhexidine impregnated chews they’ll tolerate. Wish they would pull the Xylitol from their oral rinse, though!!
Pfizer: If I had to pick a biggie, this would be it, though Lilly runs a close second. I can't offer you my complete rationale when it comes to the big conglomerates (their human pieplines count for far more than their animal health divisions), but I can discuss it by email if you're interested. For the moment, their product lines are pretty indicative of why I would invest in these companies:
Pfizer's Serenia anti-nausea product is a godsend and their Convenia two week duration injectable antibiotic promises amazing things for small animal vet medicine. Add to that the fact that I can’t get enough of Rimadyl (and discount the Slentrol weight loss fiasco) and I’m still a big Pfizer product fan. For the most part, they “get” what we vets and our pets need.
Lilly: Love their Comfortis and their Reconcile. Never has it been easier to control fleas and administer Prozac, respectively. Their consistency in turning out products I can use to push my patients’ health forward makes them a winner.
Boehringer-Ingelheim: Again, here’s a company that’s been producing good solid products since they hit the vet scene big with their easily-dosed NSAID, Metacam. The fact that they have the only NSAID labeled for cats in the biz makes them a standout (sadly, too few companies will invest in labeling for cats). Their Vetmedin, now touted as a congestive heart failure “miracle drug” has indeed made a big splash. If they can keep it up, I’ll be buying them, too, with any luck and a little savings…
Now it’s your turn…what do you buy? (or would you buy?…and why?)
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If anyone can tell me a service that allows a non-native US-resident small investor get a few shares of anything, I'd appreciate it. I tried several companies and after many pages and much subsequent spam they all rejected me as I am not a citizen (although I am a legal and long term resident)
emily May 20th, 2008 02:53:00 PM
E*Trade didn't take your money?? I'm shocked!
Dr. Patty Khuly May 20th, 2008 03:06:00 PM
Thinking from a purely portfolio-centric viewpoint, if I were going to buy pet-related stocks, WOOF would be one. It's coming off 2-year lows but is nearly double where it was 4 years ago (1k invested in WOOF 4 years ago would be 2k today).
In the long term, for better or worse, I think that "chain" corporate vet medicine is going to grow. We can debate the pluses and minuses of that, but I feel pretty certain that in the long run, people are going to continue the trend toward treating pets like members of the family and wanting human-grade expensive medical options. The corporate chain of VCA can provide that due to economies of scale. I am ambivalent about whether or not, however, this means improved quality.
I believe that the management structure of a corporate chain is well-suited to provide better standards, oversight, and quality control. But that is, ONLY if they want to. If they are focused only on maximizing profit, that potential is thrown away and they can be the coldest and worst experiences. I am very ambivalent on the subject.
I am not ambivalent about Metacam, however, and as I consider it very dangerous for cats, and am a cat lover, I would not invest in the company that markets it. I couldn't sleep at night if I did.
Stefani May 20th, 2008 04:46:00 PM
Oh, BTW, WOOF = VCA-Antech.
Stefani May 20th, 2008 04:50:00 PM
OK, sorry, I have to correct myself. That's what I get for gauging price off eyeing an online stock chart.
WOOF has gone up from 21.52 4 years ago to 32.84 today, which is about 50% growth. Lots less than 100%. Not bad, tho. Off a high of $45.22.
Just wanted to correct my error.
Stefani May 20th, 2008 04:58:00 PM
My pets have been prescribed several of the drugs mentioned, including one of the "pet supplement" brands. I really never felt strongly one way or the other, except am faithful to "Frontline".
I love Virbac shampoo & ear cleaners. The Epi-soothe is mild, non-drying and good for just about any type of coat.
Stephani, can't really coment on the VCA part of WOOF, but I say thumbs up to Antech diagnostics, and wish that the clinic I take my dogs to, utilized them for a reference laboratory. Competitive pricing, full range of services, great turn-around, great "package prices". The one time I called (YEARS AGO) to ask a few technical questions regarding methodology utilized, the receptionist was courteous---switched me to the appropriate department, and the tech was knowledgable and courteous also.
Barbara A. Albright/New Hampshire May 20th, 2008 08:20:00 PM
I'm a big fan of oxyglobin. As an emergency vet, I rely on it's mere presence in my hospital for those times when blood is in short supply (especially for cats who don't need a whole lot of the stuff). It has certainly saved a few lives in my hands. Because oxyglobin is such a big part of Biopure, I can see one investing in Biopure because of their love for Oxyglobin.
Metacam ... A+ ... I agree. Vetmedin--I certainly see lots of good cardiologists using this, but alas, don't get to use it myself, as an emergency vet. The Boehringer's line (human stuff) is solid, making this company a good investment.
The problem I run into is with companies like Pfizer. I have been investing in Pfizer for the past 7 years and they have brought me nothing but heartache and worry. Their stock prices continue to drop, and while my pseudodripping (buyandhold.com) allows me to take advantage of dollar-cost averaging while their stocks are in the gutter, my fear is that they have too much competition in the human pharm world to offset their successes with Cerenia (I'm a big fan so far) and Rimadyl (still my mainstay for dogs). In fact, I have currently stopped purchasing more shares. Haven't sold yet though.
Great summary though!
David Bessler May 20th, 2008 10:50:00 PM
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