Gordon Reid McKesson Corp MCK-N BUY Oct 22, 2024

It is a large distributer of drugs which is a volume based business and has low margins. It is not expensive.

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.

One of the biggest distributors of branded or generic drugs, and offers surgical supplies. He expects this sector to boom if Trump messes with the pharma supply chain.

Is surprised the stock hasn't split. Is one of the strongest stocks out there and plays a valuable role in society, though Washington disagrees.

Aging demographics will help. Rising 200-day and 200-week MAs. Beat last quarter, raised full-year guidance. 20x forward PE for 14-15% growth rate, a great PEG ratio.

A volume business. Competitive advantage is not huge. Has done a great job. Don't be in any rush to get rid of it. Slow and steady.

Not expensive valuation at 18s PE. Has a strong earnings engine to support that.  Growth is coming from the weight loss drugs. Likes them.

Last Thursday, they reported an EPS beat and a big revenue miss. But the report was strongly enough to trigger a rally. Unfortunately, but then Trump announced he would slash drug prices (he needs Congress to approve). Don't dump it, but take profits.

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%.