Can McKesson (MCK) Steadily Compound Earnings?

ClearBridge Investments, an investment management company, released its “ClearBridge Global Growth Strategy” first quarter 2024 investor letter. A copy of the letter can be downloaded here. During the first quarter, global equities continued to move higher fueled by improving investor sentiment, better economic data in the U.S., rate cuts beginning in Europe, and confidence in the Japanese economy. The Benchmark MSCI All Country World Index rose by 8.20%, driven by strong performance in the U.S. The S&P 500 Index surged by 10.56%, while the MSCI EAFE Index increased by 5.79%. Growth stocks saw a strong increase at the beginning of the year, buoyed by the expectation of a continued decrease in bond yields from their 2023 high. Against this backdrop, the strategy outperformed its benchmark for the quarter. In addition, please check the fund’s top five holdings to know its best picks in 2024.

ClearBridge Global Growth Strategy highlighted stocks like McKesson Corporation (NYSE:MCK), in the first quarter 2024 investor letter. McKesson Corporation (NYSE:MCK) offers healthcare services through U.S. Pharmaceutical, Prescription Technology Solutions (RxTS), Medical-Surgical Solutions, and International segments. The one-month return of McKesson Corporation (NYSE:MCK) was 6.88%, and its shares gained 42.45% of their value over the last 52 weeks. On June 26, 2024, McKesson Corporation (NYSE:MCK) stock closed at $599.56 per share with a market capitalization of $77.77 billion.

ClearBridge Global Growth Strategy stated the following regarding McKesson Corporation (NYSE:MCK) in its first quarter 2024 investor letter:

"Also in the secular bucket, we added McKesson, the leading distributor of pharmaceuticals to retail drug stores, physicians' offices and hospitals in the U.S. with the largest specialty drug and oncology business, the fastest growing, highest-margin segment of drug distribution. The company competes in a relatively stable oligopoly with two other major distributors. We believe McKesson Corporation (NYSE:MCK) can steadily compound earnings at a low-teens rate and possibly offer upside to its current multiple with credit for faster organic growth than peers."

A successful pharmacist in front of shelves of drugs in a community-based oncology pharmacy.

McKesson Corporation (NYSE:MCK) is not on our list of 31 Most Popular Stocks Among Hedge Funds. As per our database, 72 hedge fund portfolios held McKesson Corporation (NYSE:MCK) at the end of the first quarter which was 69 in the previous quarter. McKesson Corporation (NYSE:MCK) reported $76.4 billion in revenue for the fourth quarter of its fiscal year 2024, an 11% increase from the previous year. While we acknowledge the potential of McKesson Corporation (NYSE:MCK) as an investment, our conviction lies in the belief that AI stocks hold greater promise for delivering higher returns, and doing so within a shorter timeframe. If you are looking for an AI stock that is as promising as NVIDIA but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.

We discussed McKesson Corporation (NYSE:MCK) in another article and shared the list of best Jim Cramer stocks to buy. In addition, please check out our hedge fund investor letters Q1 2024 page for more investor letters from hedge funds and other leading investors.

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Disclosure: None. This article is originally published at Insider Monkey.