Questor: buy CVS, a fast-expanding business that’s immune from the economic cycle


Finding a company with a strong competitive model that can lead to healthy profits and be scaled up relatively cheaply is the holy grail of investing, especially if the stock is decent value too.

Veterinary services group CVS is the leading player in its field in Britain, generates good earnings and copious cashflow and is busily consolidating its position in its home territory while it starts to build a presence in the Netherlands with carefully chosen and priced acquisitions.

The only cloud is a lofty valuation at around 31 times this year’s earnings and 29 times next. But earnings momentum is strong and those multiples could drop sharply as the company expands.

The business is underpinned by dependable demand for veterinary services, which are generally not too affected by the ups and downs of the economic cycle. On top of that come the acquisitions.

CVS has already added 33 surgeries during…

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