Opinions
Stan Wong
McKesson Corp
MCK-N
TOP PICK
Jan 11, 2024
Stock price when the opinion was issued
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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%.
About $305B USD expected revenue for 2024. Largest customers are CVS and WMT. Middleman between end-retail pharmacies and medical product companies. Operates in a virtual triopoloy. Long term, demographics will lead to greater spending.
(Analysts’ price target is $506.44)Increased share buybacks. Beat topline and bottom line expectations on latest quarter, raised guidance. Chart's trending higher, it's the best. Outpacing S&P 500 since early 2019. Earnings growth rate of about 10%. Solid healthcare name. Yield is 0.5%.