How McKesson Corporation (MCK) Stacks Up Against Its Peers

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Due to the fact that McKesson Corporation (NYSE:MCK) has experienced falling interest from the aggregate hedge fund industry, it’s safe to say that there exists a select few funds that slashed their entire stakes between July and September. Doug Silverman and Alexander Klabin’s Senator Investment Group cut the largest position of all the hedgies watched by Insider Monkey, comprising close to $112 million in stock. William B. Gray’s fund, Orbis Investment Management, also sold off its stock, about $74.3 million worth. These transactions are intriguing to say the least, as aggregate hedge fund interest dropped by seven funds during the third quarter.

Let’s check out hedge fund activity in other stocks similar to McKesson Corporation (NYSE:MCK). These stocks are Automatic Data Processing (NASDAQ:ADP), The Bank of New York Mellon Corporation (NYSE:BK), Kinder Morgan Inc (NYSE:KMI), and Phillips 66 (NYSE:PSX). This group of stocks’ market caps are similar to MCK’s market cap.

Ticker No of HFs with positions Total Value of HF Positions (x1000) Change in HF Position
ADP 32 817244 -2
BK 47 3520476 6
KMI 68 2836616 15
PSX 29 7315837 3

As you can see these stocks had an average of 44 funds with long positions at the end of September and the average amount invested in these stocks was $3.62 billion. That figure was $1.50 billion in McKesson’s case. Kinder Morgan Inc (NYSE:KMI) is the most popular stock in this table. On the other hand Phillips 66 (NYSE:PSX) is the least popular one with only 29 funds holding shares. McKesson Corporation (NYSE:MCK) is not the most popular stock in this group, but hedge fund interest is still above average. This is a slightly positive signal but we’d rather spend our time researching stocks that hedge funds are piling on. In this regard Kinder Morgan Inc (NYSE:KMI) might be a better candidate to consider a long position.

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