MWI Veterinary Supply, Inc. - Momentum

MWI Veterinary Supply, Inc. (MWIV) recently hit a new all-time high at $64.73 after rallying into the end of the year on a Q4 earnings surprise of 16% from early November. With an average earnings surprise of 23% Over the last four quarters and bullish growth projection of 14%, this Zacks #1 rank stock could be your latest

Company Description

MWI Veterinary Supply, Inc. distributes animal health products to veterinarians in the United States. The company was founded in 1976 and has a market cap of $798 million.

Although MWIV has been rallying for most of the last 18 months, shares got an extra boost on Nov 4 when the company reported strong Q3 results that came in ahead of expectations.

Fourth-Quarter Results

Revenue for the period was up 45% from last year to $359 million. Earnings also came in strong at 71 cents, 16% ahead of the Zacks Consensus Estimate, where the company now has an average earnings surprise of 23% over the last four quarters.

The company was also focused on reducing its expenses, with selling, general and administrative costs falling to 8.5% of revenue from 9.5% last year.

MWI is also seeing big gains in online sales, up 53% from last year, now comprising 35% of the company's sales from 32% last year.

Little Debt

Although MWIV doesn't have a huge cash position, just $900,000 of cash and equivalents, it also has little debt, with a total debt load of $15 million.

Estimates

We did see a little bit of movement in estimates on the good quarter, with the current year adding 15 cents to $3.07 and the next-year estimate gaining 5 cents to $3.49, a solid 14% growth projection.

Valuation

But in spite of the gains, the valuation picture is still in check, with its forward P/E of 21X in line with the industry average.

2-Year Chart

On the chart, shares have been grinding higher for the last 18 months, recently getting a boost from the good quarter to hit a new all-time high at $64.73. Look for support from the trend line on any weakness, take a look below.

Michael Vodicka is the Momentum Stock Strategist for Zacks.com. He is also the Editor in charge of the new Zacks Momentum Trader Service.
 
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