Dear Valued Visitor,

We have noticed that you are using an ad blocker software.

Although advertisements on the web pages may degrade your experience, our business certainly depends on them and we can only keep providing you high-quality research based articles as long as we can display ads on our pages.

To view this article, you can disable your ad blocker and refresh this page or simply login.

We only allow registered users to use ad blockers. You can sign up for free by clicking here or you can login if you are already a member.

Here Is What Hedge Funds Think About McKesson Corporation (MCK)

At Insider Monkey, we track the activity of some of the best-performing hedge funds like Appaloosa Management, Baupost, and Third Point because we determined that some of the stocks that they are collectively bullish on can help us generate returns above the broader indices. Out of thousands of stocks that hedge funds invest in, small-caps can provide the best returns over the long term due to the fact that these companies are less efficiently priced and are usually under the radars of mass-media, analysts and dumb money. This is why we follow the smart money moves in the small-cap space.

McKesson Corporation (NYSE:MCK) was in 68 hedge funds’ portfolios at the end of September. McKesson Corporation (NYSE:MCK) has experienced an increase in activity from the world’s largest hedge funds lately. There were 62 hedge funds in our database with McKesson Corporation (NYSE:MCK) positions at the end of the previous quarter. At the end of this article, we will also compare McKesson Corporation (NYSE:MCK) to other stocks, including Carnival PLC (ADR) (NYSE:CUK), Dominion Resources, Inc. (NYSE:D), and Phillips 66 (NYSE:PSX) to get a better sense of its popularity.

Follow Mckesson Corp (NYSE:MCK)
Trade (NYSE:MCK) Now!

According to most traders, hedge funds are assumed to be slow, outdated financial tools of the past. While there are more than 8000 funds in operation today, Our researchers choose to focus on the crème de la crème of this group, around 700 funds. Most estimates calculate that this group of people oversees the lion’s share of all hedge funds’ total asset base, and by monitoring their top picks, Insider Monkey has come up with a few investment strategies that have historically defeated the S&P 500 index. Insider Monkey’s small-cap hedge fund strategy outperformed the S&P 500 index by 12 percentage points per year for a decade in their back tests.

Keeping this in mind, let’s analyze the latest action surrounding McKesson Corporation (NYSE:MCK).

Hedge fund activity in McKesson Corporation (NYSE:MCK)

Heading into Q4, a total of 68 of the hedge funds tracked by Insider Monkey held long positions in this stock, an increase of 10% from one quarter earlier. With hedgies’ sentiment swirling, there exists an “upper tier” of notable hedge fund managers who were upping their holdings substantially (or already accumulated large positions).

Of the funds tracked by Insider Monkey, Andreas Halvorsen’s Viking Global has the number one position in McKesson Corporation (NYSE:MCK), worth close to $420.8 million, amounting to 1.6% of its total 13F portfolio. The second most bullish fund manager is Glenview Capital, led by Larry Robbins, holding a $335 million position; the fund has 1.7% of its 13F portfolio invested in the stock. Some other professional money managers with similar optimism include D E Shaw, Daniel S. Och’s OZ Management and Cliff Asness’ AQR Capital Management.

As one would reasonably expect, specific money managers were breaking ground themselves. Southpoint Capital Advisors, managed by John Smith Clark, initiated the most valuable position in McKesson Corporation (NYSE:MCK). Southpoint Capital Advisors had $148 million invested in the company at the end of the quarter. Jacob Gottlieb’s Visium Asset Management also initiated a $118.1 million position during the quarter. The other funds with new positions in the stock are Arthur B Cohen and Joseph Healey’s Healthcor Management LP, Curtis Macnguyen’s Ivory Capital (Investment Mgmt), and David S. Winter and David J. Millstone’s 40 North Management.

Let’s now review hedge fund activity in other stocks – not necessarily in the same industry as McKesson Corporation (NYSE:MCK) but similarly valued. These stocks are Carnival plc (ADR) (NYSE:CUK), Dominion Resources, Inc. (NYSE:D), Phillips 66 (NYSE:PSX), and Shire PLC (ADR) (NASDAQ:SHPG). This group of stocks’ market values matches McKesson Corporation (NYSE:MCK)’s market value.

Ticker No of HFs with positions Total Value of HF Positions (x1000) Change in HF Position
CUK 8 37415 2
D 24 397459 2
PSX 33 6722714 -2
SHPG 43 2498587 -1

As you can see, these stocks had an average of 27 hedge funds with bullish positions and the average amount invested in these stocks was $2.41 billion. That figure was $3.32 billion in McKesson Corporation (NYSE:MCK)’s case. Shire PLC (ADR) (NASDAQ:SHPG) is the most popular stock in this table. On the other hand, Carnival plc (ADR) (NYSE:CUK) is the least popular one with only 8 bullish hedge fund positions. Compared to these stocks, McKesson Corporation (NYSE:MCK) is more popular among hedge funds. Considering that hedge funds are fond of this stock in relation to its market cap peers, it may be a good idea to analyze it in detail and potentially include it in your portfolio.

Biotech Stock Alert - 20% Guaranteed Return in One Year

Hedge Funds and Insiders Are Piling Into

One of 2015's best hedge funds and two insiders snapped up shares of this medical device stock recently. We believe its transformative and disruptive device will storm the $3+ billion market and help it achieve 500%-1000% gains in 3 years.

Get your FREE REPORT and the details of our 20% return guarantee today.

Subscribe me to Insider Monkey's Free Daily Newsletter
This is a FREE report from Insider Monkey. Credit Card is NOT required.
Loading Comments...

Thanks! An email with instructions is sent to !

Your email already exists in our database. Click here to go to your subscriptions

Insider Monkey returned 102% in 3 years!! Wondering How?

Download a complete edition of our newsletter for free!