Investors have generally been pretty willing to buy medical distributors
at rich multiples, as the large sales forces, scale-based efficiencies,
and long-term relationships with both suppliers and clients create some
barriers to entry and the nature of the business tends toward solid
cash generation. Patterson Companies (PDCO)
has had some recent challenges, though, and investors are not going to
remain patient forever. While I like the potential of this company to
continue to generate excess capital that can be passed along to
shareholders, management will need to show better performance in the
dental business to get the shares moving forward again.
Follow the link for more:
Can Patterson Companies Get It's Mojo Back?
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