The rise and rise of Zoetis stock makes Mad Money seem like a sensible move
As a public company, there is more investor scrutiny placed on Zoetis than any of the other animal health majors. How has the company dealt with the limelight? Animal Pharm editor Joseph Harvey looks at how the industry top dog has risen to the occasion
Back in February, Animal Pharm highlighted a record share price value from Zoetis as the firm's stock leapt over the $55 mark.
Then, in May – following a robust first quarter and the pending capture of Nexvet Biopharma – Zoetis saw another high-point for its stock, as it broached $60 per share.
This rise has been inexorable. Since the beginning of April, the company's shares have set off on another upward trajectory to their latest record value. Shares are currently trading at around $63 each.
Zoetis shares on the up
No doubt a successful business model and healthy financial figures have helped propel Zoetis' stock. However, there may be other factors at play. These include the firm's ability to hit targets and its communications of these milestones to a wide audience.
2017 is expected to be something of a landmark year for Zoetis. One of the aims of the firm's ongoing efficiency program is to cut $300 million from its annual costs by 2017. This target is set to be surpassed, the company's chief executive Juan Ramón Alaix told Animal Pharm earlier this year.
In fact, it is not just Animal Pharm Mr Alaix has been talking to. Zoetis' financial prowess has been covered by the mainstream media.
Mad Money is a US finance program, which has been airing on CNBC for more than a decade. According to CNBC, host Jim Cramer "is your personal guide through the confusing jungle of Wall Street investing, navigating through opportunities and pitfalls with one goal in mind – to help you make money". In May, Mr Alaix made his third appearance on the show.
Zoetis' recent financial performance has featured in the Wall Street Journal, the Financial Times and several national newspapers. Over the past 12 months, the firm has also been represented this year at major investor conferences hosted by Jeffries, Stifel, William Blair, JP Morgan, Bank of America Merrill Lynch, Credit Suisse and Cowan.
It is usually very hard to find a mention of the animal health industry amongst major news outlets. Articles about the threat of a zoonotic pandemic are common amongst the science pages, however coverage of the players coming up with solutions is sparse.
Executive director Carel du Marchie Sarvaas recently brought HealthforAnimals to the fore in an article – 'Animal health: the next eradication' – published by the Financial Times.
However, the industry's appearances in the mainstream media are few and far between. This makes Zoetis' role all the more important. As the firm's head of international operations, Clint Lewis told Animal Pharm earlier this year, the company takes its role as the market leader seriously.
Not only does Zoetis need to push itself as a financial success story – backed by it recent innovations in the companion animal space – but it also needs to act as a mouthpiece for the wider industry.
The animal health sector remains a largely private place for family-owned companies or animal health segments within larger corporations. Many of these businesses may start looking to Zoetis, not as a competitor, but as a pathfinder.
Zoetis' gain is animal health's gain and performing, even though many smaller veterinary medicine companies are not performing as well on the stock markets, a trickledown effect may be in play here.
In a similar way to the wave of IPOs that followed the creation of Zoetis, investors may now take heed of the industry leader's successful 2017 and widen their animal health portfolio.