Robert T. Lutts
Robert T. Lutts is president of Cabot Wealth Management, Salem, Massachusetts, which manages $650 million, and author of The Great Game of Business: Investing to Win. ECabot.com
This week’s Stock of the Week is a company that provides better health to pets throughout the world.
IDEXX Laboratories Inc. (IDXX) is the biggest beneficiary of the increasing attention being paid to pet health worldwide. It has 60% of the market for pet diagnostic testing—and diagnostic spending for pets has quadrupled since 2000. And there is still a lot of growth to come.
An aging population in developed countries, with people having children later in life and then living longer after children are gone, is contributing to worldwide increases in pet ownership and an increasing “humanization” of companion animals. This in turn drives the desire to keep pets healthy and willingness to spend money to do so—which boosts sales of IDEXX’s products and services for companion-animal veterinary diagnostics.
IDEXX is well-known in the field for quality. It invests about 80% more in research and development than its nearest competitors and regularly develops tests that are faster, more accurate, provide more information, and are easier to show and explain to pet owners. These include blood, urine and fecal tests, and IDEXX makes both the machines to do the testing and the testing materials. Its chairman and CEO, Jonathan Ayers, has led IDEXX for almost 16 years and has fostered a strong growth culture with a focus on quality. The company had revenue of $1.97 billion last year. That should grow to $2.25 billion this year and $2.6 billion next year.
Fiscal year: December. Earnings per share: 2019 est./$5…2018 est./$4.15…2017/$3.28.
Robert T. Lutts is president, Cabot Wealth Management, Salem, Massachusetts, which manages $650 million, and author of Winding the Stem: Entrepreneurs, Innovation and Wealth Creation. ECabot.com
