Zoetis Inc. (ZTS 0.73%) is the globe's biggest animal health company, and its sales and profit are benefiting from tailwinds that are supporting market growth, including an expanding population and increasing global wealth. Nevertheless, billionaire investor Bill Ackman -- a longtime bull on the company -- sold over 20 million shares of Zoetis' last quarter, or roughly half his total stake in the company. Should investors follow Ackman out of Zoetis, or should they double down and buy more?

In this clip from The Motley Fool's Industry Focus: Healthcare podcast, analyst Kristine Harjes and contributor Todd Campbell weigh in on the global animal health giant and whether it still deserves to be owned in investors' portfolios.

A full transcript follows the video.

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This podcast was recorded on Aug. 31, 2016.

Kristine Harjes: I think it's pretty clear that pet spending is a big spending force. How can an investor take advantage of this? What companies are in the space?

Todd Campbell: Well, the big kahuna that investors need to focus on, or at least spend a little time getting familiar with, is a company called Zoetis. The symbol on that stock is ZTS. This was formerly the animal-health products division of Pfizer; it got spun off by Pfizer back in 2013, when Pfizer was downsizing, after it lost patent protection on its multibillion-dollar cholesterol drug Lipitor.

Zoetis is a very intriguing company. It's the biggest player out there. It's a pure play on animal health. They operate both companion-animal businesses and livestock businesses.

Harjes: Right, we haven't really touched on livestock business very much, but that's a pretty big part of a lot of these companies, in addition to what you would imagine when you think of pet healthcare, with your medicines and vaccines and vet trips.

Campbell: Right, you want to keep your livestock healthy. If you're a farmer and you have cattle, you want to make sure that they're healthy when they make it to market. So, you have vaccinations and other things that you do to make sure these animals are healthy.

Harjes: Exactly. One other part of the Zoetis story that I think is worth mentioning is that there's some involvement with a famous billionaire named Bill Ackman; he runs Pershing Square Capital Management. Their latest 13F revealed that they actually dumped a ton of their stakes in Zoetis: They now own 55% less of it than they did at the end of the first quarter. This has something to do with them having an activist campaign, trying to get the company to cut costs.

And, as always, when we talk about billionaires, you should not follow them blindly. What do you think, Todd? Is this an instance where you might want to follow Ackman? Do you find the stock interesting?

Campbell: I think you have to take it with a very big grain of salt. Anyone who's listened to our program in the past knows that Ackman has a big stake in a company called Valeant. Valeant's shares have been hit pretty hard. It wouldn't shock me if some of the sale in Zoetis, which is up 56% since Feb. 2013, some of that is profit-taking to free up some cash. I think investors are much better served, when it comes to looking at the pet category, to ignore the machinations of the billionaires who may be trafficking in and out of these stocks, and just simply look at the long-term potential for sales and earnings.

Harjes: Right. With that, I will reiterate -- this is your biggest pure play. It can be kind of hard to find pure-play stocks in animal health. The norm is that it's a small subsection of another bigger company -- of Merck, Bayer, Eli Lilly -- all have relatively small parts of their business devoted to animal health. But with Zoetis being spun off from Pfizer, it stands alone as: "I want to invest in this trend, and this is a way that you could do so."

Campbell: And that gives it a lot of advantages over these other companies. Think about this: All of the efforts for Zoetis are focused solely on driving sales growth and profit growth in the animal-health business. It doesn't have to compete with other pharmaceuticals, like if you're talking about Merck, for research dollars. So, there can be a lot of advantages associated with buying a company like Zoetis, rather than trying to say, "OK, I'm going to buy Merck & Co. because it's the second-biggest maker of animal-health products." It's a much smaller piece of Merck's puzzle. 

You look at Zoetis' competitive advantage. They say they're 45% bigger than the next biggest. So, it's a massive company. They expect they're going to do about -- I think it's $4.8 billion in sales this year -- they think they can grow that to $5 billion-plus next year. It's a profitable company, it makes some money. Investors should probably bank on somewhere around single-digit top-line growth from here, like 3% to 6%, and maybe better than that on the bottom line. Maybe earnings are going to grow closer to double digits because of some cost savings, into being able to leverage greater sales against fixed costs.