Core Viewpoint - Zoetis Inc. announces the retirement of Dr. Rob Polzer at the end of 2025 and the appointment of Dr. Kevin Esch as the new President of Research & Development starting January 1, 2026, highlighting a planned succession to maintain momentum in innovation within the animal health sector [1][2][3]. Leadership Transition - Dr. Rob Polzer will retire on February 28, 2026, after a decade of contributions to veterinary medicine and innovation, and will serve as a scientific advisor through 2026 to ensure a smooth transition [1][3]. - Dr. Kevin Esch, currently Senior Vice President of Global Therapeutics, will take over the role, bringing over 10 years of experience as a veterinarian and a strong background in research and development [2][7]. Innovation and Growth Strategy - Zoetis is committed to advancing animal care globally through a robust innovation pipeline, with expectations for significant product approvals in major markets annually for the next several years [4]. - The company has introduced 17 blockbuster products and over 2,000 new products and lifecycle innovations in the past 12 years, investing more in R&D than any other animal health company [4]. Upcoming Events - An Innovation Webcast is scheduled for December 2, 2025, to update investors and the public on Zoetis' innovative pipeline and strategic approach to addressing unmet needs in the industry [5]. Contributions of Dr. Rob Polzer - Under Dr. Polzer's leadership, Zoetis has launched several groundbreaking products and established new markets, significantly transforming standards of care in animal health [10][11]. - His tenure has been marked by a focus on scientific rigor and collaboration, leading to advancements in therapies, vaccines, and digital solutions [10][11]. Background of Dr. Kevin Esch - Dr. Esch has held various influential roles within Zoetis since joining in 2014, overseeing global research and development efforts and managing key acquisitions [7][8]. - His educational background includes a Doctor of Veterinary Medicine, a Master of Public Health, and a Ph.D. in Immunobiology, reflecting a strong commitment to veterinary medicine [8][9].

Core Viewpoint - IDEXX Laboratories Inc. reported better-than-expected third-quarter financial results and raised its 2025 forecast, leading to an increase in stock price [1][9]. Financial Performance - The company reported third-quarter adjusted earnings of $3.22 per share, a 15% increase year-over-year, surpassing the consensus estimate of $3.13 [1]. - Sales reached $1.105 billion, exceeding the consensus of $1.073 billion, reflecting a 13% increase on a reported basis and 12% on an organic basis [2]. - Companion Animal Group (CAG) revenue grew to $1.012 billion, up from $891.9 million, with diagnostics recurring revenue growth of 11% reported and 10% organic [3]. Revenue Growth Drivers - CAG growth was driven by a 14% increase as reported and 12% organic, while Poultry and Dairy (LPD) revenue grew by 17% reported and 14% organic [2]. - U.S. growth in CAG was supported by higher diagnostic frequency and easing clinical visit pressures, with international regions showing 18% reported and 14% organic gains [3]. Profitability Metrics - Gross profit increased to $683.35 million, reflecting a 15% increase as reported and 13% on a comparable basis, with a gross margin of 61.8%, up 70 basis points [4]. - Operating margin for the quarter was 32.1%, an increase of 100 basis points compared to the prior year [5]. Guidance and Future Outlook - The company raised its fiscal 2025 earnings guidance from a range of $12.40-$12.76 per share to $12.81-$13.01 per share, above the consensus of $12.62 [6]. - Sales guidance for 2025 was increased from $4.205 billion-$4.28 billion to $4.27 billion-$4.30 billion, compared to the consensus of $4.232 billion [6]. - Updated guidance includes reported revenue growth of 9.6%-10.3% and organic growth of 8.8%-9.5% for 2025 [6]. Analyst Insights - Analysts noted ongoing weakness in end markets but highlighted that IDEXX shares remain near record highs due to a new product cycle [8]. - Concerns over vet visit trends and pricing pressures may persist, but the third-quarter results provide reassurance regarding the company's ability to meet expectations [8].

Core Insights - Five stocks have been added to the Zacks Rank 1 (Strong Buy) List, indicating strong potential for investment returns Group 1: Company Summaries - **PennyMac Mortgage Investment Trust (PMT)**: This real estate investment trust focuses on residential mortgage loans and related assets, with a 10.3% increase in the Zacks Consensus Estimate for current year earnings over the last 60 days [1] - **NatWest Group (NWG)**: A banking and financial services company offering a range of services including personal and business banking, with a 7.5% increase in the Zacks Consensus Estimate for current year earnings over the last 60 days [2] - **Phibro Animal Health (PAHC)**: A global diversified animal health and mineral nutrition company providing products for food animals, with a 4.4% increase in the Zacks Consensus Estimate for current year earnings over the last 60 days [3] - **Centene (CNC)**: A well-diversified healthcare company serving government-sponsored healthcare programs, with a 2.4% increase in the Zacks Consensus Estimate for current year earnings over the last 60 days [4] - **ACNB (ACNB)**: A provider of banking and financial services to individuals and businesses, also seeing a 2.4% increase in the Zacks Consensus Estimate for current year earnings over the last 60 days [4]

Core Insights - Diamond Hill Capital's "Select Fund" underperformed the Russell 3000 Index in Q3 2025, returning 4.98% compared to the index's 8% gain [1] - The fund initiated four new positions in Q3, including Zoetis Inc., indicating a belief in the long-term growth potential of certain companies despite market trends [3] Company Overview: Zoetis Inc. (NYSE: ZTS) - Zoetis Inc. specializes in animal health medications, vaccines, and diagnostic products, with a market capitalization of $63.792 billion as of October 29, 2025 [2] - The stock experienced a one-month return of -1.74% and a 52-week decline of 19.49% [2] - In Q2 2025, Zoetis reported $2.5 billion in revenue, reflecting a 4% growth on a reported basis and 8% on an organic operational basis [4] Investment Sentiment - Despite the overall market rally, the fund believes that Zoetis's stock price does not reflect its long-term growth outlook [3] - Zoetis is not among the top 30 most popular stocks among hedge funds, with 75 hedge fund portfolios holding its shares at the end of Q2 2025, a slight increase from 74 in the previous quarter [4] - The fund suggests that while Zoetis has investment potential, certain AI stocks may offer greater upside with less downside risk [4]

Core Viewpoint - Elanco Animal Health is expected to report flat earnings of $0.13 per share for the quarter ended September 2025, with revenues projected at $1.09 billion, reflecting a 5.9% increase year-over-year [1][3]. Earnings Report Expectations - The earnings report is scheduled for November 5, and better-than-expected results could lead to a stock price increase, while disappointing results may cause a decline [2]. - Management's discussion during the earnings call will be crucial in determining the sustainability of any immediate price changes and future earnings expectations [2]. Estimate Revisions - The consensus EPS estimate has been revised down by 2.15% over the last 30 days, indicating a bearish sentiment among analysts regarding the company's earnings prospects [4]. - The Most Accurate Estimate for Elanco is lower than the Zacks Consensus Estimate, resulting in an Earnings ESP of -5.88%, complicating predictions for an earnings beat [12]. Earnings Surprise History - In the last reported quarter, Elanco was expected to post earnings of $0.20 per share but actually delivered $0.26, resulting in a positive surprise of +30.00% [13]. - Over the past four quarters, the company has beaten consensus EPS estimates three times [14]. Investment Considerations - Despite the negative Earnings ESP, the stock holds a Zacks Rank of 2, indicating a potential for positive performance, although it does not strongly suggest an earnings beat [12][17]. - Investors are advised to consider other factors beyond earnings surprises when making investment decisions regarding Elanco [15][17].

Core Viewpoint - Zoetis Inc. has appointed Stephanie Tilenius to its Board of Directors, effective December 1, 2025, enhancing its leadership with her extensive experience in technology and digital health [1] Company Summary - Stephanie Tilenius is a serial entrepreneur with a background in founding healthcare companies, including a recent venture in the longevity AI sector [1] - She previously founded Vida Health, Inc., which is recognized as a leading B2B company in the healthcare space [1]

Core Viewpoint - The New World screwworm is identified as a significant potential public health emergency by Health and Human Services Secretary Robert F. Kennedy Jr. [1] Group 1 - The New World screwworm poses a considerable risk to public health, necessitating attention and action from health authorities [1]

Core Insights - Zacks Premium offers various tools to enhance stock market investment confidence and knowledge [1][2] Zacks Style Scores - Zacks Style Scores are indicators that rate stocks based on value, growth, and momentum methodologies, helping investors identify stocks likely to outperform the market in the next 30 days [3][4] - Each stock is rated from A to F, with A indicating the highest potential for outperformance [4] Value Score - The Value Score focuses on identifying undervalued stocks using financial ratios like P/E, PEG, and Price/Sales [4] Growth Score - The Growth Score emphasizes a company's financial health and future growth potential, analyzing projected and historical earnings, sales, and cash flow [5] Momentum Score - The Momentum Score assesses stocks based on price trends and earnings outlook changes, indicating optimal times to invest in high-momentum stocks [6] VGM Score - The VGM Score combines all three Style Scores, providing a comprehensive indicator for selecting stocks with attractive value, growth forecasts, and momentum [7] Zacks Rank - The Zacks Rank is a proprietary model that uses earnings estimate revisions to guide investors in building successful portfolios [8] - Stocks rated 1 (Strong Buy) have historically achieved an average annual return of +23.81%, significantly outperforming the S&P 500 [9] Stock Highlight: Phibro Animal Health (PAHC) - Phibro Animal Health Corporation is a global leader in animal health and mineral nutrition, offering nearly 770 product lines across more than 80 countries [12] - PAHC holds a 1 (Strong Buy) Zacks Rank and a VGM Score of B, with a Growth Style Score of A, indicating a projected year-over-year earnings growth of 21.1% for the current fiscal year [13][14] - Recent analyst revisions have increased the earnings estimate for fiscal 2026 by $0.23 to $2.53 per share, with an average earnings surprise of +27.9% [13]

Core Insights - Zomedica Corp. has launched the Assisi Loop Lounge, a next-generation targeted pulsed electromagnetic field (tPEMF) therapy bed designed for pets, emphasizing both therapeutic effectiveness and comfort [1] - The Assisi Loop Lounge offers unlimited uses and a lifetime warranty, enhancing its value proposition for pet owners and veterinary professionals [1] - This product is distinguished as the only small animal tPEMF device supported by peer-reviewed scientific research, establishing its credibility among veterinarians and pet owners globally [1] Company Overview - Zomedica is an animal health company focused on innovative point-of-care diagnostic and therapeutic products for equine and companion animals [1] - The introduction of the Assisi Loop Lounge expands Zomedica's evidence-based therapeutic portfolio, reinforcing its leadership in the tPEMF innovation space [1] Product Features - The Assisi Loop Lounge provides full-body treatment, combining superior comfort with advanced therapeutic technology [1] - The product is designed to deliver lasting therapeutic value, making it a trusted choice in the veterinary market [1]

Core Thesis - Zoetis Inc. is positioned as a leading player in the animal pharmaceuticals sector, benefiting from strong industry trends and a resilient business model, despite its stock lagging behind broader market performance [2][6]. Company Overview - Zoetis, spun off from Pfizer in 2013, is the largest publicly traded animal health company, with a diverse portfolio that includes products for companion animals and livestock [3]. - The company generates 55% of its revenue from the U.S., primarily from pet-related products, and is expanding into emerging markets such as China, Brazil, and Africa [4]. Financial Performance - As of October 13th, Zoetis's share price was $142.26, with trailing and forward P/E ratios of 25.21 and 21.69 respectively [1]. - Despite record revenue, profit, and free cash flow growth, Zoetis's shares have decreased approximately 11% over the past five years and 40% since January 2022 [2]. Product Portfolio - The top ten products of Zoetis contribute 55% of the projected 2024 revenue, with key products like Simparica/Simparica Trio and Apoquel driving recurring demand [3]. - The company maintains a strong focus on R&D, ensuring ongoing innovation and product longevity, with many top drugs remaining relevant long after patent expiration [5]. Market Dynamics - The animal health industry benefits from secular tailwinds such as the increasing human-animal bond, longer pet lifespans, and lower-cost R&D compared to human pharmaceuticals [2]. - Zoetis's focus on companion animals offers higher margins and less cyclical demand compared to livestock, enhancing its pricing power [5].