MCK
Mckesson Corporation
Healthcare
10/25/2021
Presented
| Date | 10/18/2021 |
| Price | $200.80 |
| Market Cap | $31.06B |
| Ent Value | $37.65B |
| P/E Ratio | N/A |
| Book Value | N/A |
| Div Yield | 0.86% |
| Shares O/S | 154.68M |
| Ave Daily Vol | 887,233 |
| Short Int | 1.71% |
Current
| Price | $513.67 |
| Market Cap | $66.61B |
| McKesson Corp. engages in the provision of supply chain management solutions, retail pharmacy, community oncology and specialty care, and healthcare information technology. It operates through the following segments: U.S. Pharmaceutical; International; Medical-Surgical Solutions; and Prescription Technology Solutions (“RxTS”). The U.S. Pharmaceutical segment distributes branded, generic, specialty, biosimilar and over-the-counter pharmaceutical drugs, and other healthcare-related products; provides practice management, technology, clinical support, and business solutions to community-based oncology, and other specialty practices; and sells financial, operational, and clinical solutions to pharmacies and provides consulting, outsourcing, technological, and other services. The International segment provides distribution and services to wholesale, institutional, and retail customers in 13 European countries and Canada. The Medical-Surgical Solutions segment provides medical-surgical supply distribution, logistics, and other services to healthcare providers, including physician offices, surgery centers, nursing homes, hospital reference labs, and home health care agencies. The RxTS segment brings together CoverMyMeds, RelayHealth, RxCrossroads, and McKesson Prescription Automation, including Multi-Client Central Fill as a Service, to serve biopharma and life sciences partners and patients. The company was founded by John McKesson and Charles Olcott in 1833 and is headquartered in Irving, TX. |
Publicly traded companies mentioned herein: Amazon.com Inc (AMZN), McKesson Corp (MCK)
Highlights
The presenter is long shares of McKesson Corp (MCK), which is his favorite idea going into 2022. Of all the companies that have grown earnings in the mid-teen% range over the last 20 years, MCK at 9x next year’s earnings is the lowest valuation, even accounting for the earnings impact from its opioid settlement. He attributes the low multiple to the negative opioid PR but doesn’t believe it will remain a relevant aspect of the investment story into 2022. Rather, MCK’s prospects as an accelerating compounder, a long-time effective capital allocator, and a beneficiary of accelerating utilization is the narrative he sees taking hold. In a time when investors are focused on whether the S&P 500’s 21x earnings multiple is too high, he is content to own MCK at a 9x earnings multiple with its compounding attributes.
◆Signing up and creating account with us unlocks this content for you. Contact us today for full access to DeMatteo Research and more.
◆Signing up and creating account with us unlocks this content for you. Contact us today for full access to DeMatteo Research and more.