On Mar 28, 2013, we reaffirmed our long-term Neutral
MWI Veterinary Supply
) following the strong first-quarter fiscal 2013 results. This
leading distributor of animal health products carries a Zacks
Rank #3 (Hold).
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MWI VET SUPPLY (MWIV): Free Stock Analysis
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On Feb 4, 2013, MWI Vet reported robust double-digit growth to
begin fiscal 2013 on a positive note. EPS rose 25.7%
year-over-year to $1.32, reflecting a beat of 10.9% over the
Zacks Consensus Estimate.
MWI Vet is witnessing growth across all regions and product
categories. As a result, revenues increased 24% year over year to
$572.8 million in the quarter, easily surpassing the Zacks
Consensus Estimate of $532 million. On an organic basis, domestic
growth was 16.6%, whereas sales growth in U.K. was 22%.
MWI Vet's strategic approach to support growth momentum is
yielding positive results. Its costs saving initiatives led to a
26.4% surge in operating income. Further, its efforts to expand
sales force and provide value-added services resulted in an
improved growth profile.
The company also resorts to inorganic route to fuel growth in a
highly fragmented and competitive market. The latest buyout of
Prescription Containers is expected to be immediately accretive
for MWI Vet.
Evidently, MWI Vet's business is fully based on its relationship
with vendors. Thus, any adverse changes in vendor rebates might
negatively impact the company. Going forward, its growth will
largely depend on obtaining favorable terms from its vendors.
While macroeconomic uncertainty and volatile commodity prices
remain a cause of concern, management is also wary that the
recent drought might adversely affect fiscal 2013 results.
In addition, competitive landscape remains tough and
consolidation by competitors could result in a tussle for market
share. Thus, we prefer to remain on the sidelines for MWI Vet.
On the other hand, we look forward to other healthcare stocks
The Cooper Companies
). These stocks carry a Zacks Rank #2 (Buy).