Is McKesson Corporation (MCK) A Good Stock To Buy?

“McKesson is the largest amongst the three player U.S. pharmaceutical distributors. The industry enjoys significant barriers to entry, as size and scale of network are paramount. With the recent Walgreens Boots Alliance bid for Rite Aid, which accelerated the share price weakness of McKesson, we took notice and initiated a position. Even if Rite Aid is acquired, a big ‘if’ due to competitive issues, McKesson stands to lose less than 10% of its net income. Because of the ongoing client attrition and Rite Aid headlines, the market appears to have overlooked potential flow through of generic pricing to McKesson’s income statement and added synergies from recent acquisitions. We estimate McKesson’s value at $220, even assuming the Rite Aid contract is completely lost.”

Keeping this in mind, we’re going to take a gander at the latest action surrounding McKesson Corporation (NYSE:MCK).

What have hedge funds been doing with McKesson Corporation (NYSE:MCK)?

At the end of the fourth quarter, a total of 63 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of -7% from the previous quarter. With hedgies’ sentiment swirling, there exists a few key hedge fund managers who were boosting their holdings meaningfully (or already accumulated large positions).