Paul MacDonaldMcKesson CorpMCKCOMMENTMay 10, 2017

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.

One of the largest distributors of pharmaceuticals in USA.
Expecting to grow earnings 12-15% annual.
Trading at good share price for long term investors.
Beneficiary of domestic spending. 
Will continue to hold. 

Earnings are growing about 12-14% per year, revenues over 10%. Trades about 15x earnings. Exited European operations, so now a pure play on a domestic company and a hedge against international exposure. Yield is 0.59%.