Mr. Motiwala also believes that McKesson Corporation (NYSE:MCK) has suffered from undervaluation due to several reasons, like “increasing deflationary pressure” on generic drugs and slower price growth registered by branded drugs. However, the manager of Motiwala Capital believes that McKesson Corporation (NYSE:MCK) has a strong competitive position as the pharmaceutical and medical supply distributor forms an oligopoly together with AmerisourceBergen Corp. (NYSE:ABC) and Cardinal Health Inc (NYSE:CAH). McKesson Corporation (NYSE:MCK) also has strong free cash flow, which it can use to fund acquisitions, as well as conduct stock buybacks and pay out dividends.
There were 55 funds tracked by Insider Monkey that held shares of McKesson Corporation (NYSE:MCK) at the end of June. Among these funds, Paul Reeder and Edward Shapiro’s PAR Capital Management is the top shareholder, holding 3.27 million shares as of the end of June.
Motiwala Capital is also bullish on discount retailer Big Lots, Inc. (NYSE:BIG), because the company managed to perform “reasonably well” in a difficult retail environment. The $2.30 billion company managed to reduce its costs, closed down underperforming locations and increased its operating margins. Mr. Motiwala also believes that Big Lots, Inc. (NYSE:BIG)’s free cash flow position is solid, which allows the company to return capital to shareholders through dividends and buybacks. Big Lots, Inc. (NYSE:BIG)’s stock is 6.40% in the green year-to-date and has a dividend yield of 1.87%.
At the end of June, 22 funds in our database held long positions in Big Lots, Inc. (NYSE:BIG), having amassed over 10% of the company’s outstanding stock in aggregate. Dmitry Balyasny‘s Balyasny Asset Management is the largest shareholder of Big Lots among the investors tracked by us, with a stake containing 1.08 million shares.
Last but not least, Motiwala’s holding in New York REIT Inc (NYSE:NYRT) represents 2.6% of its portfolio. New York REIT Inc (NYSE:NYRT) is a small-cap real estate investment trust that owns 19 commercial properties in Manhattan that together have around 3.3 million square feet of rentable space. The REIT currently has a dividend yield of 5.90%. Mr. Motiwala bought shares of New York REIT Inc (NYSE:NRT) because the company is selling its real estate assets and using the proceeds to return capital to shareholders. The REIT plans to liquidate next year.
There were 33 funds in our database holding shares of New York REIT Inc (NYSE:NRT) at the end of June; these funds collectively owned over 25% of the REIT. Among these investors, Amy Minella‘s Cardinal Capital, and Bulldog Investors, led by Phillip Goldstein, Andrew Dakos and Steven Samuels, hold the largest positions in the REIT, as they have ownership of 9.39 million shares and 3.43 million shares, respectively, as of the end of June.
Disclosure: None
