Schein Over Europe

On Friday, dental and medical products distributor Henry Schein (Nasdaq: HSIC) completed the purchase of a set of European operations with roughly $340 million in sales (not counting those it will divest for regulatory reasons) for the fiscal year ended Sept. 30. The acquisitions stand to significantly boost the Melville, N.Y.-based company's overseas operations: In 2003, Henry Schein reported $577 million in international sales, up 32% year over year in U.S. dollars.

Henry Schein, as reported by dentist's son Seth Jayson in March, is a company that's doing a lot of things right. Last year, the company, along with competitors like Dentsply International (Nasdaq: XRAY) and Patterson Dental (Nasdaq: PDCO), reported solid sales and earnings growth. The company is well regarded in a strong and growing market segment. This confluence of factors has been good for investors: Henry Schein shares are ahead of the S&P 500 by a good margin, even though they've fallen considerably since late April.

Presumably investors considering a purchase of Henry Schein stock are encouraged by the recent share swoon. First-quarter results looked generally good, and the profit outlook for 2004 is upbeat. Europe, particularly, seems like a rich opportunity for the company. Management sees the Western European market as worth some $5.7 billion, and the company has a ways to go before its market share there will approximate its standing in North America. Acquisitions like last week's can only help.

Additionally, the company recently picked up a contract to distribute MedImmune's (Nasdaq: MEDI) FluMist. The launch of the no-needle flu vaccine, as noted by Alyce Lomax earlier this month, was rocky for MedImmune and former distribution partner Wyeth (NYSE: WYE).

If MedImmune and Henry Schein can put things right, there's a good opportunity there. It's just one more reason Henry Schein deserves close attention from medical sector investors.

Fool contributor Dave Marino-Nachison doesn't own any of the companies in this article.