One Fund Bought Up Henry Schein Stock Amid Record Quarterly Results and a New $200 Million Efficiency Plan

Chicago-based Zuckerman Investment Group disclosed a purchase of 72,040 additional shares of Henry Schein (NASDAQ:HSIC) in a November 13 SEC filing, increasing its stake by approximately $3.38 million from the previous period.

What Happened

According to a November 13 SEC filing, Zuckerman Investment Group increased its holding in Henry Schein (NASDAQ:HSIC) by 72,040 shares compared to the previous quarter. The post-trade position reached 281,339 shares with a reported value of $18.67 million as of September 30. The purchase reflects normal trading activity for the fund, which reported $1.08 billion in U.S. equity assets across 157 positions.

What Else to Know

Zuckerman's purchase brought the position to 1.73% of 13F AUM, outside its top five holdings.

Top holdings after the filing:

• NYSE:VRT: $99.39 million (9.2% of AUM)
• NASDAQ:ULTA: $57.49 million (5.34% of AUM)
• NASDAQ:GOOGL: $42.09 million (3.9% of AUM)
• NYSE:MCK: $36.52 million (3.39% of AUM)
• NASDAQ:MSFT: $34.83 million (3.24% of AUM)

As of Monday, HSIC shares were priced at $76.33, up about 8% over the past year and underperforming the S&P 500, which is instead up about 15.5% in the same period.

Company Overview

Company Snapshot

• Henry Schein offers a broad portfolio of dental and medical products, including infection-control supplies, pharmaceuticals, surgical products, equipment, and digital practice management solutions.
• The company operates a distribution-driven business model with value-added technology and financial services, generating revenue primarily through product sales and recurring service fees.
• It serves dental practitioners, laboratories, physician practices, government agencies, and institutional healthcare clinics worldwide.

Henry Schein, Inc. is a leading global distributor of healthcare products and services, with a focus on dental and medical markets. The company leverages its extensive distribution network and technology-enabled services to deliver integrated solutions for practitioners and healthcare institutions. Its scale, diversified offerings, and longstanding customer relationships provide a competitive advantage in the medical distribution sector.

Foolish Take

Henry Schein’s third-quarter results showed why a fund like Zuckerman may be upping its stake even as shares lag the broader market. Revenue climbed 5% to $3.3 billion, with sales accelerating in each reportable segment. Meanwhile, adjusted EBITDA rose to $295 million, and non-GAAP EPS increased 13% year over year to $1.38. Just as important, management raised full-year non-GAAP EPS guidance to a range of $4.88 to $4.96 and lifted its sales growth outlook to 3% to 4%.

The firm’s operating story has similarly been improving beneath the surface. Global technology sales grew nearly 10%, specialty products climbed close to 6%, and management now expects more than $200 million of operating income improvement from value creation initiatives over the next few years.

Zuckerman’s purchase fits neatly alongside the fund’s other holdings in capital-efficient, cash-generating businesses rather than speculative growth plays. Henry Schein also repurchased $229 million of stock during the quarter and still has $980 million authorized -- all reasons a long-term investor may be eyeing shares at current prices.

Glossary

13F reportable AUM: The total value of U.S. equity assets a fund manager must report quarterly to the SEC.
Net position change: The difference in the number or value of shares held after a new purchase or sale.
Post-trade stake: The total number of shares or value held in a company after a trade is completed.
AUM (Assets Under Management): The total market value of investments managed by a fund or firm on behalf of clients.
Top holdings: The largest investments in a fund's portfolio, usually ranked by market value.
Trailing twelve months (TTM): The 12-month period ending with the most recent quarterly report.
Forward P/E: Price-to-earnings ratio using projected future earnings instead of past earnings.
EV/EBITDA: Enterprise value divided by earnings before interest, taxes, depreciation, and amortization; a valuation metric.
Distribution-driven business model: A business strategy focused on selling and delivering products through a broad distribution network.
Value-added technology: Technology services or products that enhance the core offering, providing extra benefits to customers.
Recurring service fees: Ongoing charges for services provided regularly, such as subscriptions or maintenance contracts.

Jonathan Ponciano has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Alphabet, Microsoft, and Ulta Beauty. The Motley Fool recommends McKesson and recommends the following options: long January 2026 $395 calls on Microsoft and short January 2026 $405 calls on Microsoft. The Motley Fool has a disclosure policy.