Corner of Berkshire & Fairfax Message Board

General Category => Investment Ideas => Topic started by: SlowAppreciation on April 23, 2017, 06:58:32 AM

Title: HSIC - Henry Schein
Post by: SlowAppreciation on April 23, 2017, 06:58:32 AM
Anyone looked at this company before? Large distributor in: dental, animal health, and medical (rev split 50/30/20). Both ends of the funnel are fragmented (many suppliers and many end customers), but with 2-3 distributors controlling most of the dental and vet supply markets.

It's not cheap per se, but growth—both organic and via acq—has been strong for many years. Returns on capital are adequate, and they have reasonable levels of debt.
Title: Re: HSIC - Henry Schein
Post by: Phaceliacapital on April 24, 2017, 02:08:13 AM
One of the better quality companies I know of and seems to be perpetually expensive ...

Dentsply is similar and looks somewhat cheaper.

Very interested to hear your thoughts after research.
Title: Re: HSIC - Henry Schein
Post by: glorysk87 on April 24, 2017, 07:16:30 AM
One of the better quality companies I know of and seems to be perpetually expensive ...

Dentsply is similar and looks somewhat cheaper.

Very interested to hear your thoughts after research.

Dentsply and HSIC are very different companies. Dentsply manufactures products (they developed and manufacture one of the most popular CAD/CAM systems).  HSIC is purely distribution and software support.
Title: Re: HSIC - Henry Schein
Post by: SlowAppreciation on April 24, 2017, 07:49:24 AM
One of the better quality companies I know of and seems to be perpetually expensive ...

Dentsply is similar and looks somewhat cheaper.

Very interested to hear your thoughts after research.

I think Patterson is their big competitor in the dental space.
Title: Re: HSIC - Henry Schein
Post by: roark33 on April 24, 2017, 05:15:43 PM
Patterson and AmerisourceBergen are the three distributors in this space. 
Title: Re: HSIC - Henry Schein
Post by: mrholty on April 24, 2017, 09:19:18 PM
One of the better quality companies I know of and seems to be perpetually expensive ...


This has been on my watchlist with a price that I update regularly yet it never gets cheap enough. 
Title: Re: HSIC - Henry Schein
Post by: Phaceliacapital on April 25, 2017, 01:44:26 AM
Sorry I meant PDCO, don't know why I put down Dentsply.
Title: Re: HSIC - Henry Schein
Post by: SlowAppreciation on April 27, 2017, 11:55:58 AM
I don't think it's actually all that overpriced right now. My DCF gets ~$150/share (10% discount rate and 5% growth rate), which is only 10% discount to current prices for a company which has secular tailwinds (aging population, increasing medical cost, geographic expansion), consistent mid-to-high teens ROE, buys back shares, is asset-light, and #1 or #2 in the markets they operate in.

Not cheap enough for me to take a position, but definitely one I'm keeping my eye on. 
Title: Re: HSIC - Henry Schein
Post by: glorysk87 on June 22, 2017, 06:51:28 AM
HSIC is hitting my price targets, and considering the looming Amazon threat I'm deciding to sell rather than tough it out for a couple extra points. If Amazon never enters the space HSIC will continue to do very well, but it's a big unknown for me, and not a risk I'm keen on taking.
Title: Re: HSIC - Henry Schein
Post by: SlowAppreciation on June 22, 2017, 03:13:37 PM
HSIC is hitting my price targets, and considering the looming Amazon threat I'm deciding to sell rather than tough it out for a couple extra points. If Amazon never enters the space HSIC will continue to do very well, but it's a big unknown for me, and not a risk I'm keen on taking.

I thought Amazon entered the medical supply space a little while ago, but I haven't heard anything about how they've been doing. I looked at PDCO too, which is interesting because they seem to be pretty much the same company, but smaller. So what is it about dental and pet supplies that are so "synergistic"?
Title: Re: HSIC - Henry Schein
Post by: ccplz on June 22, 2017, 11:24:04 PM
I don't think it's actually all that overpriced right now. My DCF gets ~$150/share (10% discount rate and 5% growth rate), which is only 10% discount to current prices for a company which has secular tailwinds (aging population, increasing medical cost, geographic expansion), consistent mid-to-high teens ROE, buys back shares, is asset-light, and #1 or #2 in the markets they operate in.

Not cheap enough for me to take a position, but definitely one I'm keeping my eye on.

5% growth rate? how the fuck do you assume a terminal growth rate that's higher than terminal GDP growth rate?
Title: Re: HSIC - Henry Schein
Post by: Phaceliacapital on June 06, 2018, 06:22:35 AM
Anyone still looking at Henry or Patterson as a way to "play" the ever increasing pet market?
Title: Re: HSIC - Henry Schein
Post by: glorysk87 on June 06, 2018, 07:00:54 AM
Anyone still looking at Henry or Patterson as a way to "play" the ever increasing pet market?

HSIC is spinning off their Animal Healthy business and merging it with Vets First Corp.
Title: Re: HSIC - Henry Schein
Post by: mwtorock on September 26, 2018, 01:17:46 PM
https://www.sprucepointcap.com/henry-schein-inc/