Re: PAHC & ELAN
Company was a small cap at the time and already leveraged w/ debt. The catalyst I believe was the decision by management to buy the animal food/mineral division from ZTS at a cost of $350 million. It was about 1/3 of their marketcap at the time. The positive is it increased revenues by 27% YoY and complemented their other products.
Phibro Animal Health Corporation is a leading global diversified animal health and mineral nutrition company. The company provides a broad range of products for food animals including poultry, swine, beef and dairy cattle and aquaculture. In addition to animal health and mineral nutrition products, Phibro manufactures and markets specific ingredients for use in the personal care, automotive, industrial chemical and chemical catalyst industries. Currently, Phibro focuses on regions where the majority of livestock production is consolidated in large commercial farms such as the U.S., Brazil, China, Russia, Mexico, Australia, Turkey, Israel, Canada and Europe. I like the sector and have been building a position in Elanco Animal Health Inc (ELAN) another company in the same business. It is no longer a value selling at 20x PE. I was late to this name but it is also +100% from lows from 4/2024.
The only catalyst I see for ELAN it was added to the Russel 400 S&P. It is/was 9x the size of PAHC. Both PAHC & ELAN appear fairly priced. I continue to hold equal size in both companies. They make a good contribution to my Ag basket. I like the Ag sector long term. |
