Chicago-based Zuckerman Investment Group disclosed a purchase of 72,040 additional shares of Henry Schein (HSIC 1.18%) in a November 13 SEC filing, increasing its stake by approximately $3.38 million from the previous period.
What Happened
According to a November 13 SEC filing, Zuckerman Investment Group increased its holding in Henry Schein (HSIC 1.18%) by 72,040 shares compared to the previous quarter. The post-trade position reached 281,339 shares with a reported value of $18.67 million as of September 30. The purchase reflects normal trading activity for the fund, which reported $1.08 billion in U.S. equity assets across 157 positions.
What Else to Know
Zuckerman's purchase brought the position to 1.73% of 13F AUM, outside its top five holdings.
Top holdings after the filing:
- NYSE:VRT: $99.39 million (9.2% of AUM)
- NASDAQ:ULTA: $57.49 million (5.34% of AUM)
- NASDAQ:GOOGL: $42.09 million (3.9% of AUM)
- NYSE:MCK: $36.52 million (3.39% of AUM)
- NASDAQ:MSFT: $34.83 million (3.24% of AUM)
As of Monday, HSIC shares were priced at $76.33, up about 8% over the past year and underperforming the S&P 500, which is instead up about 15.5% in the same period.
Company Overview
| Metric | Value |
|---|---|
| Revenue (TTM) | $12.94 billion |
| Net Income (TTM) | $391.00 million |
| Price (as of Monday) | $76.33 |
| One-Year Price Change | 8% |
Company Snapshot
- Henry Schein offers a broad portfolio of dental and medical products, including infection-control supplies, pharmaceuticals, surgical products, equipment, and digital practice management solutions.
- The company operates a distribution-driven business model with value-added technology and financial services, generating revenue primarily through product sales and recurring service fees.
- It serves dental practitioners, laboratories, physician practices, government agencies, and institutional healthcare clinics worldwide.
Henry Schein, Inc. is a leading global distributor of healthcare products and services, with a focus on dental and medical markets. The company leverages its extensive distribution network and technology-enabled services to deliver integrated solutions for practitioners and healthcare institutions. Its scale, diversified offerings, and longstanding customer relationships provide a competitive advantage in the medical distribution sector.
Foolish Take
Henry Schein’s third-quarter results showed why a fund like Zuckerman may be upping its stake even as shares lag the broader market. Revenue climbed 5% to $3.3 billion, with sales accelerating in each reportable segment. Meanwhile, adjusted EBITDA rose to $295 million, and non-GAAP EPS increased 13% year over year to $1.38. Just as important, management raised full-year non-GAAP EPS guidance to a range of $4.88 to $4.96 and lifted its sales growth outlook to 3% to 4%.
The firm’s operating story has similarly been improving beneath the surface. Global technology sales grew nearly 10%, specialty products climbed close to 6%, and management now expects more than $200 million of operating income improvement from value creation initiatives over the next few years.
Zuckerman’s purchase fits neatly alongside the fund’s other holdings in capital-efficient, cash-generating businesses rather than speculative growth plays. Henry Schein also repurchased $229 million of stock during the quarter and still has $980 million authorized -- all reasons a long-term investor may be eyeing shares at current prices.
Glossary
13F reportable AUM: The total value of U.S. equity assets a fund manager must report quarterly to the SEC.
Net position change: The difference in the number or value of shares held after a new purchase or sale.
Post-trade stake: The total number of shares or value held in a company after a trade is completed.
AUM (Assets Under Management): The total market value of investments managed by a fund or firm on behalf of clients.
Top holdings: The largest investments in a fund's portfolio, usually ranked by market value.
Trailing twelve months (TTM): The 12-month period ending with the most recent quarterly report.
Forward P/E: Price-to-earnings ratio using projected future earnings instead of past earnings.
EV/EBITDA: Enterprise value divided by earnings before interest, taxes, depreciation, and amortization; a valuation metric.
Distribution-driven business model: A business strategy focused on selling and delivering products through a broad distribution network.
Value-added technology: Technology services or products that enhance the core offering, providing extra benefits to customers.
Recurring service fees: Ongoing charges for services provided regularly, such as subscriptions or maintenance contracts.
