Patterson Companies underperformed
Patterson (PDCO) was the worst performer within the Health Care Select Sector SPDR ETF (XLV) for the period between August 25 and August 31, 2015, with a return of -4.10%. The stock underperformed XLV in the same period. PDCO has a weight of 0.14% in XLV’s portfolio with a market cap of ~$4.7 billion. Some of PDCO’s peers according to market cap like Dentsply International (XRAY), PerkinElmer (PKI), and Tenet Healthcare (THC) outperformed PDCO with returns of 1.67%, 5.94%, and 4.97%, respectively.
The above graph reflects the performance of PDCO compared to some of the company’s peers and XLV.
Patterson announces first quarter results
PDCO announced its first quarter fiscal 2016 earnings on August 27, 2015. The company follows a April-March calendar. PDCO revenue stood at $1.1 billion, up 22% over the corresponding period last year. The revenues also include a contribution from the recently acquired Animal Health International. The company reported a GAAP (generally accepted accounting principles) net income of $20.3 million as compared to $38.3 million in the first quarter of last fiscal year.
Wall Street seems to be disappointed with the company’s reduced net income on a quarterly basis. The stock as of August 31, 2015, closed at $45.83. The stock is trading below its 20-day, 50-day, and 100-day moving averages. The current stock price is below the lower Bollinger Band price of $46 and appears to be moved into a temporary oversold position. The company also announced the completion of the sale of its medical business to Madison Dearborn Partners.