Moon Capital Management, LLC, an investment management company, released its second quarter 2025 investor letter. A copy of the letter can be downloaded here. The S&P 500 index rebounded in the second quarter, achieving a 9.6% return for the first half of the year, while Moon Capital Management’s equity portfolio gained 4%. AI-related stocks led market performance, mitigating geopolitical concerns. Moon Capital holds 10% of its portfolio in technology, significantly less than the S&P 500’s 39%. The firm remains cautious about large AI investments and their potential return on investment. In addition, please check the Strategy’s top five holdings to know its best picks in 2026.
In its Q2 2026 investor letter, Moon Capital Management highlighted Zoetis Inc. (NYSE:ZTS) as a newly added position. Zoetis Inc. (NYSE:ZTS) is an animal health company focused on animal health medications, vaccines, and diagnostic products. On July 22, 2026, Zoetis Inc. (NYSE:ZTS) closed at $74.19 per share. One-month return of Zoetis Inc. (NYSE:ZTS) was -4.66%, and its shares lost 51.45% over the past 52 weeks. Zoetis Inc. (NYSE:ZTS) has a market capitalization of $31.1 billion.
Moon Capital Management stated the following regarding Zoetis Inc. (NYSE:ZTS) in its Q2 2026 investor update:
“We added one new stock to the portfolio last quarter, Zoetis Inc. (NYSE:ZTS). (Our average purchase price was about $73.20/share.) Zoetis is the world’s largest pure-play animal health company. We have long viewed Zoetis as one of the highest-quality businesses in healthcare (albeit for mostly four legged patients), and the company has generally been valued accordingly. However, temporary concerns around slower companion animal growth and increased competitive pressures created an opportunity to purchase the company at an attractive price. After trading above 30 times earnings for much of the past decade, Zoetis now has a P/E of less than 11x, a valuation we believe significantly understates the quality, durability, and long-term earnings power of the business.
The animal health industry is attractive as it combines the defensive characteristics of healthcare investing with a more favorable industry structure than traditional pharmaceuticals. In contrast to human healthcare, a significant portion of animal health spending is paid directly by owners, which reduces reimbursement pressure. The industry also benefits from lower research and development costs, shorter development timelines, and strong relationships with veterinarians. These relationships, combined with regulatory barriers and specialized technical expertise, create meaningful switching costs and contribute to long product lifecycles…” (Click here to read the full text)