Opinions
Stuart Hinshelwood
McKesson Corp
MCK-N
TOP PICK
Feb 18, 2014
Stock price when the opinion was issued
You might be interested:
Certainly some stocks are less vulnerable to issues involving tariffs. What comes to mind are healthcare companies. You could look at some of the beaten-down companies that really didn't do well last year, as they're doing quite well today. Try this name, which he owns.
Many attempts to lower drug prices in the US, and every one of them has failed. Very highly entrenched business to deconstruct. But stocks will rerate on the noise. So how much downside would there be to revenue?
He wouldn't buy this here. Tariffs and the drug noise have provided opportunities to expand in the healthcare space, which is very undervalued right now.
Likes the reliable earnings. Steady prescriptions, specialty therapy (increases margins). In oncology drug space, which also has good margins. Automation and AI are helping margins further. 10-12% earnings growth rate at a decent PE. Just under 70% of Americans take at least 1 prescription drug a day; 25% take 4 or more. Population aging and more complex conditions will support volume growth of prescription drugs.
You don't find a chart better than this, long-term uptrend. Ascending channel of higher highs and higher lows. Yield is 0.39%.
Management team seems to be exceptionally strong. Bought a number of companies over the last couple of years and just completed a big acquisition in Germany which makes them a big, significant, generics distributor in Europe which will be accretive to earnings. Looking out a couple of years, he could see $11-$12 in earnings. Very, very good at execution. Yield of 0.54%.