Paul MacDonald Amerisourcebergen Corp ABC-N DON'T BUY Jan 17, 2020

(A Top Pick April 4/16. Up 4%.) Part of the fallout from the healthcare situation in the US. Trading at very mid-teen multiples, much less than what the market is trading at. Also, this is partially owned by Walgreens (WBA-Q) who got the contract away from CVS (CVS-N), so there is going to be an extra 40 million prescriptions going to be written that Amerisource is going to take advantage of. He is going to continue to Buy more.

CVS Health Corp (CVS-N) vs Walgreen Boots Alliance (WBA-O) or stay out of health care? He prefers Walgreen between the two, due to their Rite Aid acquisition. They feel that a safer option is AmerisourceBergen (ABC-N) as they are more on the distribution side.

He is not a big fan of drug distributors. The technical chart has been whippy. He would prefer to see higher highs on the chart and confirmed by relative strength. The healthcare space is neutral in their valuation. (Analysts’ price target is $105 )

This drug distributor controls huge volumes of non-proprietary distribution networks. There is uncertainty in health care generally however. It is very inexpensive here. He would consider buying at these levels.

One of the three major US drug distributors. Partnered with Walgreens to buy drugs from manufacturers in bulk, then sell to pharmacies and hospitals at profit. Trades at a low multiple. The industry has challenges: generic pricing has been soft and declining, but that's stabilizing now to ABC's margins. ABC has the highest exposure among its peers to specialty pharmaceuticals which are growing faster at higher margins. Their contracts are set through 2020. (Analysts' price target $103.87)