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Patterson Companies Was XLV’s Worst Performer

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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.

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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.

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