I found myself having a ‘eureka!’ moment recently. It ended with me buying shares in CVS Group.
What led me to make this decision, you may ask? Well writing for The Motley Fool has two benefits. It brings writers the enormous street cred of working for such a respected brand. It also provides opportunity to work with some truly brilliant people (can I get my pay rise now?).
Working for the Fool serves an important function to us writers as investors, too. It brings to our attention the brilliant companies that the London stock market has to offer. And CVS is a share that I covered just prior to the release of its brilliant financials in early February.
The appeal of veterinary care specialist CVS became apparent on a more personal level, too, when I took my moggy Marcel to the vet last week for some dental work.
Pet care is often an expensive business. Once the cost of a scale and polish, anaesthetic, drugs, extractions, and pre-op blood and urine samples were tallied up, I found myself nursing a bill for over £1,000. Ouch. And I’m bracing myself for more costs this week when Marcel has fresh vaccinations along with his post-op check.
Large bills are part and parcel of owning a pet. We will do anything to keep them healthy and living long and enjoyable lives. The explosion in pet insurance demand in recent years shows that people are increasingly taking steps to ensure that they can give their furry friends the medical help they need as and when required.
This same phenomenon is keeping trading at Pets at Home ticking along nicely, too. The woes of the broader UK retail sector have commanded many column inches over the past year. But this one-stop-shop for all our pet care requirements is avoiding the worst of the washout.
Indeed, like-for-like sales at Pets at Home actually rose a healthy 7.2% in the 12 weeks to 3 January. Retail revenues rose 7% on the same basis, while corresponding turnover across its vet surgeries leapt 8.9%.
Another medical marvel
The very same motives for why I bought into CVS Group could be extended to Dechra Pharmaceuticals. This company makes many of the medicines, anaesthetics, specialist foods, and surgical products that are used by today’s vets, allowing it to latch onto booming spending on pet care as well.
Dechra isn’t just a big player in the UK, though. Its drive to expand its geographical footprint is allowing it to ride booming pet ownership rates on foreign shores too. And its appetite for acquisitions is paying dividends by supercharging its catalogue of medicines and its R&D pipeline, too. Just last month it paid $135m to purchase the Osurnia line of drugs. This is used to treat ear inflammation in dogs.
No wonder Dechra, like CVS has seen annual earnings swell by double-digit percentages in recent times, then. Both these shares have very bright futures and are brilliant buys for the next decade.