HSIC

Henry Schein Inc

Healthcare


Presented:11/22/2016
Price:$76.46
Cap:$12.52B
Current Price:$71.10
Cap:$9.01B

Presented

Date11/22/2016
Price$76.46
Market Cap$12.52B
Ent Value$15.03B
P/E Ratio25.4x
Book Value$18.00
Div Yield0%
Shares O/S163.71M
Ave Daily Vol1,557,256
Short Int4.98%

Current

Price$71.10
Market Cap$9.01B
Henry Schein, Inc. engages in the provision of providing health care products and services to medical, dental, and veterinary office-based practitioners. It operates through Healthcare Distribution and Technology and Value-Added Services segments. The Healthcare Distribution segment includes consumable products, small equipment, laboratory products, large equipment, equipment repair services, branded and generic pharmaceuticals, vaccines, surgical products, diagnostic tests, infection-control products and vitamins. The Technology and Value-Added Services segment offers financial services on a non-recourse basis, e-services practice, technology, network and hardware services. The company was founded by Henry Schein and Esther Schein in 1932 and is headquartered in Melville, NY.

Please note, this stock split on 9/15/2017 at a ratio of 2/1. The presented data has been updated to account for the change, however, the text of the note may refer to data based on the original presented price of $159.92.

Publicly traded companies mentioned herein: Amazon.com Inc (AMZN), Henry Schein Inc (HSIC), Patterson Companies (PDCO)

Highlights

The presenter is short shares of healthcare products distributor Henry Schein (HSIC) at present levels (~$150) and sees downside risk for shareholders due to negative developments in the dental distribution market (including the threat of competition from Amazon), which represents just shy of 50% of the company’s total sales. The company is over-indexed to DSOs (dental support organizations) and Patterson is increasing its focus on this segment of the market (as opposed to continuing its focus on individual dental practices). Additionally, the stock appears to be expensive at 21x the Street’s 2017 EPS estimate of ~$7.20. If the presenter’s forecasts are accurate, then HSIC’s earnings should fall short of this bogey by 5-10%; taking the higher end of this range to be conservative implies the stock would be more fairly valued at $123 (18x $6.85/ share).

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