McKesson Corp (MCK-N)

Very good franchise. Earnings growth about 17%, probably about the same next year. Dividend growth in the teens, attractive. Cautious on healthcare because of the US election cycle; it's an easy target. Very predictable business.

In US healthcare he owns LLY, REGN, and MCK.

Owns shares in company. Pharmaceutical distribution - very profitable. Recent share price dip, a good time to buy. Earnings expected to grow. Ability to generate strong margins within the sector. Will continue to hold. 

Great growth stalwart and compounder. Leader in what's essentially an oligopoly. Earnings miss last quarter, margin pressure. Sales headwinds, partly due to plateauing demand for GLP-1 obesity drugs. Revenue pressure in pharmacy technology solutions.

None of that derails long-run growth thesis. Healthcare addresses a need, not a want. Demographic play. Compelling entry point. Will be higher 1 and 5 years from now, secular backdrop is just that good.

The GLP-1 weight loss companies are really in the sweet spot. For example for LLY, a very large holding for him, the opportunity for them is a very large marketplace. Getting approval for a broader range of uses. 

He also owns ISRG, which will help with the cost of healthcare, a very big growth opportunity. He owns MCK too.

Those 3 names together make up a 5% weight for him, which is underweight the market.

XLV gives you a basket of names, with some winners and some losers. LLY is the top holding, that's a winner. Also holds JNJ and PFE, which haven't done particularly well. 

He owns NVO, MCK and CAH. He likes those companies where the only serious competition comes from 1 or 2 others, as they can control pricing power. Diabetes and weight loss are definite growth areas. See his Top Picks.

In pharma space, prefers growthy areas such as distributors like CAH and MCK.

Leader, controls 1/3 of the industry. Virtual triopoly gives them leverage and predictable cashflow. Population is aging. At least 60% of Americans use at least 1 drug, and this will increase over time. High-demand segments such as weight loss and diabetes are rising, which will increase demand for its logistics and distribution. Yield is 0.5%.

Increased share buybacks last summer. Beat top and bottom on last results. Upped guidance for 2024. Share price trending higher, above 200-day and 200-week MAs. Has beat S&P since early 2019. About 12% earnings growth rate. Classic, steady healthcare name to own.

Still likes it. Room to grow. Sees about 10% earnings growth. Prescription drug usage in US continues to rise. Only 3 players, with 90% market share. See his Top Picks.

It reports Wednesday.  He likes it. They typically under-promise and over-deliver, though nothing is guaranteed.

Has sold share, but wish that had held on to them. Very low margins, but operate in oligopoly. Excellent prospects for the future of business. Large moat around business with economies of scale. Disciplined management team with continued growth in earnings per share. Good for long term investors. 

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. 

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%.

Stock is not a household name, but Rexall is, which MCK just bought. Core business is wholesale drug distribution in US. Negotiates bulk drug purchases and distributes them. Low margin, but high inventory turnover, so high ROE. Stable, non-cyclical. In oligopoly with 2 others and a combined 90% market share. Non-discretionary. 

Chart looks nice, undemanding multiple of 15.5x earnings. Has grown at 10% compound rate over the last decade, well positioned to continue this. Yield is 0.5%.

Global leader. Operates in a virtual tri-opoly. Significant leverage in negotiating supply, which gives predictable cashflow. Aging population will increase volumes. Almost 60% of all Americans use at least 1 prescription drug, expected to rise. Increased demand for diabetes and weigh-loss drugs. 

Beat on top and bottom lines, increased guidance. Share price above rising moving averages. Outperforming broader index. Forecast 10% earnings growth going forward. Yield is 0.55%.

Though drug companies are a target of politicians citing high drug prices, it keeps printing cash. For now, it's a cheap stock that won't be hurt by higher interest rates.

Still likes it. The drug sector remains strong given an aging population and a flurry of new drugs.