Replies to post #3 on Zoetis Inc. (ZTS)

[DewDiligence]

The rationale for owning ZTS is simple: #msg-84067676.

[DewDiligence]

More color on ZTS spinoff from Bloomberg: #msg-84125595.

[DewDiligence]

IPO epilogue / ZTS’ long-term prospects:

ZTS will turn out to be a solid long-term holding, IMO. If they can grow sales at 5-7% per annum, which seems like a conservative forecast, they have ample leverage from the SG&A and income-tax lines (and share buybacks) to generate 10%+ EPS growth for several years. This projection doesn’t even include growth from bolt-on acquisitions, which will likely add a few more percentage points.

For the animal-health (i.e. animal-drug) industry to do badly, people around the world would have to start eating less meat or owning fewer pets, both of which run counter to trends consequent to The Global Demographic Tailwind (#msg-84067676). ZTS could conceivably lose market share and perform badly even if the animal-health industry as a whole remains strong, but there’s no logical reason I know of why that should happen.