Sector Wrap: Veterinary services

William Blair analysts kept "Outperform" ratings on two veterinary service companies Monday, saying the sector is a strong opportunity for investment despite weakness in the U.S. economy.

Ryan Daniels and Kristina Blaschek maintained their ratings on veterinary hospital operator VCA Antech Inc. and diagnostic products and services company Idexx Laboratories Inc. Both companies made presentations at the firm's annual growth stock conference on Tuesday.

"We continue to view the animal health care space as a compelling long-term investment opportunity," they wrote, adding it is an attractive alternative to human health care services.

The analysts said Idexx gets more than 40 percent of its revenue from outside the U.S., which helps protect it from weaker domestic results. The company also offers tests and services that aren't affected by the economy _ and while a pet owner might save money by delaying a checkup for a healthy pet, demand for dairy testing and water safety won't be affected.

Idexx maintained its profit forecast for the year, and the analysts said VCA Antech had a "slightly more positive outlook" on the veterinary health care market. But fewer customers are taking their pets to the vet, and veterinarians are becoming less willing to try to sell add-on services to customers.

But according to the analysts, VCA Antech's management is convinced that the industry's growth won't be affected after the economy recovers, and there are still opportunities for VCA Antech to buy many other animal hospitals.

The analysts said the company is a "premier operator" in the industry.

In late trading, VCA Antech shares dipped 25 cents to $29.10, and Idexx stock shed 52 cents to $51.89.