Zoetis: Another Bad Quarter, Some Value Trap Risk But Shares Still Cheap

Ian Bezek Investing Group Leader Follow Summary Zoetis' Q2 earnings results were mixed, and the company cut its forward guidance. This has reduced the stock's margin of safety, but on balance, the risk/reward profile still favors the bulls. Zoetis has other segments performing well which partially offset the weakness in U.S. pet-related sales. I am bullish on Zoetis stock, but with a longer-term time horizon as the next few quarters are likely to be challenging. Looking for a helping hand in the market? Members of Ian's Insider Corner get exclusive ideas and guidance to navigate any climate. Learn More » korawat thatinchan/iStock via Getty Images I wrote about animal health company Zoetis (NYSE: ZTS ) in July. At that time, I argued that the 60% decline was justified, but shares were finally buyable . In that piece, I laid out my broad approach This article was written by Ian Bezek 23.8K Followers Follow Ian Bezek is a former hedge fund analyst at Kerrisdale Capital. He has spent the decade living in Latin America, doing the boots-on-the ground research for investors interested in markets such as Mexico, Colombia, and Chile. He also specializes in high-quality compounders and growth stocks at reasonable prices in the US and other developed markets. Ian leads the investing group Ian's Insider Corner. Features of the group include: the Weekend Digest which covers everything from new ideas to updates on current holdings and macro analysis, trade alerts, an active chat room, and direct access to Ian. Learn More. Analyst’s Disclosure: I/we have no stock, option or similar derivative position in any of the companies mentioned, and no plans to initiate any such positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article. Seeking Alpha's Disclosure: Past performance is no guarantee of future results. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. Any views or opinions expressed above may not reflect those of Seeking Alpha as a whole. Seeking Alpha is not a licensed securities dealer, broker or US investment adviser or investment bank. Our analysts are third party authors that include both professional investors and individual investors who may not be licensed or certified by any institute or regulatory body.