In order to explain what kinds of businesses we look for as potential destinations for investment capital, we have published many previous posts describing some of the important criteria. Readers may wish to go back to the series on "Beautiful Growth Companies" (part one, part two, and part three) for some discussion of those criteria, and they may wish to look at individual companies that we have highlighted in previous discussions (many of those discussions of individual businesses are linked in this previous post).
One of the companies we own in the portfolios we manage is IDEXX Laboratories, an innovative provider of diagnostic solutions primarily for use in the animal health industry (serving both companion animals or pets and production animals or livestock).* Their solutions are also being applied in the water and food safety diagnosis field.
IDEXX Labs develops, manufactures, and distributes products that allow animal healthcare providers to test for an impressive array of diseases, from canine heartworm to feline leukemia, from avian leukosis to chicken anemia, from bovine spongiform encephalitis (mad cow) to swine influenza and swine pseudo-rabies. The company has created a wide variety of "assay kits" which can be used right in the field to test animals -- for instance, they market simple tests that dairy owners can use to test milk for antibiotic contamination before shipping it in bulk to a milk plant (where, if it is discovered that their load has contaminated other loads, they may be liable for the losses of the owners of dairies whose milk had to be dumped due to the contact).
Other IDEXX assay kits enable vets to test pets for Lyme disease or parvo or pancreatitis, or allow cattle ranchers to test potential new additions to the herd for bovine viral diarrhea virus (BVDV) through a simple ear-notch test so that they can catch sick animals before they contaminate the rest of their cattle. Many of these assay tests return results in a matter of minutes.
IDEXX also manufactures and sells diagnostic equipment to veterinary offices and diagnostic labs, and they run their own lab business so that vets can send samples to IDEXX for testing with rapid turnaround times.
Additionally, the company develops and markets a range of products used for testing water safety for human consumption and for recreational use (lakes and pools and rivers, for example), including tests that can detect the presence of all coliform bacteria (including E. coli), enterococci, cryptosporidium (which is potentially fatal if ingested), and giardia.
While there are formidable competitors in the vet diagnostic field, we believe that IDEXX has demonstrated that they are extremely innovative and have a reputation for quality, and we also judge that the market that they serve consists of a very fragmented field of veterinary healthcare service providers which may be in the process of undergoing some consolidation, and that some of the companies that are doing the consolidating are IDEXX customers.
We provide these highlights of IDEXX not only because we believe it is an interesting and well-run business and one with which many readers may not be familiar, but even more because we are trying to give our readers an idea of the kind of characteristics that we believe they should be looking for as destinations for their investment capital.
We believe that when it comes to investing money for success over many years and even over many decades, it is vitally important to have a clear idea of what traits in a company investors should look for, so that they can participate in the future success of those companies. While the names of the companies that we own will necessarily change over the years, the characteristics we are looking for generally do not.
* At the time of publication, the principals of Taylor Frigon Capital Management own securities issued by IDEXX Laboratories (IDXX).
One of the companies we own in the portfolios we manage is IDEXX Laboratories, an innovative provider of diagnostic solutions primarily for use in the animal health industry (serving both companion animals or pets and production animals or livestock).* Their solutions are also being applied in the water and food safety diagnosis field.
IDEXX Labs develops, manufactures, and distributes products that allow animal healthcare providers to test for an impressive array of diseases, from canine heartworm to feline leukemia, from avian leukosis to chicken anemia, from bovine spongiform encephalitis (mad cow) to swine influenza and swine pseudo-rabies. The company has created a wide variety of "assay kits" which can be used right in the field to test animals -- for instance, they market simple tests that dairy owners can use to test milk for antibiotic contamination before shipping it in bulk to a milk plant (where, if it is discovered that their load has contaminated other loads, they may be liable for the losses of the owners of dairies whose milk had to be dumped due to the contact).
Other IDEXX assay kits enable vets to test pets for Lyme disease or parvo or pancreatitis, or allow cattle ranchers to test potential new additions to the herd for bovine viral diarrhea virus (BVDV) through a simple ear-notch test so that they can catch sick animals before they contaminate the rest of their cattle. Many of these assay tests return results in a matter of minutes.
IDEXX also manufactures and sells diagnostic equipment to veterinary offices and diagnostic labs, and they run their own lab business so that vets can send samples to IDEXX for testing with rapid turnaround times.
Additionally, the company develops and markets a range of products used for testing water safety for human consumption and for recreational use (lakes and pools and rivers, for example), including tests that can detect the presence of all coliform bacteria (including E. coli), enterococci, cryptosporidium (which is potentially fatal if ingested), and giardia.
While there are formidable competitors in the vet diagnostic field, we believe that IDEXX has demonstrated that they are extremely innovative and have a reputation for quality, and we also judge that the market that they serve consists of a very fragmented field of veterinary healthcare service providers which may be in the process of undergoing some consolidation, and that some of the companies that are doing the consolidating are IDEXX customers.
We provide these highlights of IDEXX not only because we believe it is an interesting and well-run business and one with which many readers may not be familiar, but even more because we are trying to give our readers an idea of the kind of characteristics that we believe they should be looking for as destinations for their investment capital.
We believe that when it comes to investing money for success over many years and even over many decades, it is vitally important to have a clear idea of what traits in a company investors should look for, so that they can participate in the future success of those companies. While the names of the companies that we own will necessarily change over the years, the characteristics we are looking for generally do not.
* At the time of publication, the principals of Taylor Frigon Capital Management own securities issued by IDEXX Laboratories (IDXX).
