VCA Inc (WOOF): Larry Robbins’ Glenview Capital Bets on Veterinary Services, Increases Stake by 45%

Larry Robbins’ Glenview Capital recently disclosed a marked increase in its stake in VCA Inc (NASDAQ:WOOF), a $3.4 billion market cap provider of veterinary services and diagnostic testing, testing equipment, and other medical technology products and related services. The addition of 4 million shares to the fund’s equity portfolio imply a 45% increase in its stake in the company.

The fund now owns approximately 12.8 million shares of VCA Inc (NASDAQ:WOOF)’s Common Stock, which account for almost 15% of the company’s outstanding shares. The position has a current market value of more than half a billion dollars – considering that the stock currently trades around $39.60 per share. This share price implies a valuation at 24.4 times the company’s earnings, well below the 36x-37x P/E industry average. In addition, the company boasts industry-leading margins and returns, while its debt levels stand substantially below its peers’.

GLENVIEW CAPITAL

Mr. Robbins is probably betting on growth, as both the company and its wider industry are are being subject of consistent earnings estimates revisions activity. EPS estimates for the current quarter and current year have gone up, and now stand at $0.52 (up from $0.51 previously) for the current quarter, and $2.04 for the current year (up from $2.01).

Allthough Mr. Robbins’ fund is the largest hedge fund investor of record in VCA Inc (NASDAQ:WOOF), it is not the only bull. Ricky Sandler’s Eminence Capital boosted its exposure by 7% over the second quarter of the year, and now owns 5.19 million shares, worth more than $182 million. D E Shaw upped its bet by the same percentage, last disclosing ownership of 1.28 million shares. Meanwhile, Daniel S. Och’s OZ Management added 63% to its holdings at the company over the second quarter, and now owns more than 2.85 million shares of Common Stock.

I should highlight that VCA Inc (NASDAQ:WOOF) is amongst those stocks that have helped Mr. Robbins return 18% in the first half of the year, as its price escalated almost 12% over the period. Year-to-date, the stock is up 26.4%.

Disclosure: Javier Hasse holds no position in any stocks or funds mentioned.

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