Day 182: Bullish Veeva Systems
The Mother's Little Helper portfolio was DOWN today -$1,124.53 (+0.15%). Overall GAIN YTD: +$166,826.57 (+28.57%).
According to CNN Money our benchmark index, the S&P 500 is up +8.94% Year To Date (http://money.cnn.com/data/markets/sandp/).
Today I wanted to take a look at one of my favorite companies in the portfolio, Veeva Systems, a Bay Area cloud computing company.
Veeva Systems Inc. (VEEV) is our alternative investment in healthcare. VEEV is our 9th best performer year-to-date, turning in a +49.54% return. Healthcare investments usually take the form of a broadly diversified fund made up of large healthcare and pharmaceutical companies. However those companies can present one of two extremes, range bound laggards or super volatile rockets, the steady performers are few and far between (sans Celgene). I chose Veeva Systems because it benefits from the complexities of getting drugs approved.
Veeva is a leading global provider of cloud-based software solutions for the life sciences industry. Their solutions enable pharmaceutical and other life sciences companies to realize the benefits of modern cloud-based computing and mobile applications for their most critical business functions, without compromising industry-specific functionality or regulatory compliance. At the heart of Veeva’s product line is the Veeva Vault Platform, a content management platform that streamlines end-to-end clinical trial processes. Veeva’s Clinical Suite of products include Clinical Solutions, Regulatory Solutions, Quality Control Solutions, Medical Solutions, Commercial Solutions and Industry specific products for Pharma & Biotech, Consumer Health, Animal Health, Medical Devices & Diagnostics.
Show me the money! With a market capitalization of $8.711 billion, Veeva Systems has been a consistent earnings machine. According to Zacks Research, over the next five years, the analysts that follow this company are expecting VEEV to grow earnings at an average annual rate of 19.64%. This year, analysts are forecasting earnings increase of 37.45% over last year.
While gross margins have remained essentially the same year-over-year, VEEV has grown sales and net income substantially, in most cases outpacing the competition. VEEV has a quick-ratio of 2.89 which simply means they can easily cover all their short-term cash needs. Without going through all the statistics it’s safe to say that by almost any measure VEEV is a cash machine. VEEV trades at a Price/Earning that is similar to its peers, has Sales Growth significantly higher than its peers which means it's stealing market share and on a Price/Projected Earnings is trading at a significant premium; however VEEV has typically exceeded earnings projections. The valuation statistic that I love the most is Earning Growth. Analysts expect VEEV to have an Earnings Growth rate significantly higher than its peers 70.25 vs. -9.25. While VEEV is quickly approaching the 1 year target estimate of $65/share, the highest estimates range between $70 - $82/share. Let’s stay long Veeva Systems and thank them for helping to streamline the drug approval process while contributing nicely to Mother Little Helper.
Thank you VEEV, Mother's everywhere thank you.
Stay Invested,
Clay Baker
Disclosure: I am personally invested long in these stocks that appear in the MLH portfolio and may purchase or sell share withing the next 72 hours. I am also invested in other stocks that do not appear in the MLH portfolio: BA, BRK.B, CELG, CSCO, CTXS, CVX, DOW, DVAX, FB, IBM, NTES, NVDA, OMER, PFE, PG, RDHL, SCHW, THO, TWX, VEEV, VZ, XLNX, XOM
I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it. I have no business relationship with any company whose stock is mentioned in this article.
This article is not intended to offer investing advice, guarantee 100% accurate predictions, or to be interpreted as providing a personal recommendation.
