NEW YORK (TheStreet) -- Shares of Zoetis (ZTS) are slightly lower on Tuesday, despite announcing a $500 million share repurchase program. "This company has been the leader in science for animal health," said TheStreet's Jim Cramer, co-manager of the Action Alerts PLUS portfolio.
The company, a spinoff from Pfizer (PFE) with a $22 billion market cap, may have announced the buyback in order to prevent a possible takeover attempt from Valeant Pharmaceuticals (VRX) and hedge fund manager Bill Ackman.
Ackman recently took a $2 billion stake in Zoetis, a company that is clearly in defense mode, Cramer said on CNBC's "Cramer's Mad Dash" segment.
The stock is up about 47% in the past six months alone, prompting Cramer to ask, "Isn't management performing well enough? Why bring in an activist investor?"
He turned to GoPro (GPRO) , which is higher by 4.5% after announcing a secondary offering of 10.4 million shares, 1.3 million of which are new shares and 9.1 million shares of which are from insiders.
The secondary offering appears to be "widely over-subscribed," Cramer reasoned, which is forcing investors to go to the open market to buy more shares. The holiday season is likely to be strong for GoPro and the short squeeze is pushing the stock higher, he concluded.
-- Written by Bret Kenwell
TheStreet Ratings team rates ZOETIS INC as a Hold with a ratings score of C. TheStreet Ratings Team has this to say about their recommendation:
"We rate ZOETIS INC (ZTS) a HOLD. The primary factors that have impacted our rating are mixed ? some indicating strength, some showing weaknesses, with little evidence to justify the expectation of either a positive or negative performance for this stock relative to most other stocks. The company's strengths can be seen in multiple areas, such as its revenue growth, solid stock price performance and impressive record of earnings per share growth. However, as a counter to these strengths, we also find weaknesses including generally higher debt management risk and weak operating cash flow."
You can view the full analysis from the report here: ZTS Ratings Report