10 Best Stocks To Buy Right Now According To Billionaire Cliff Asness

8. McKesson Corporation (NYSE:MCK)

Number of Hedge Fund Holders In Q2 2024: 70

AQR Funds’ Latest Investment Stake: $500.8 million

McKesson Corporation (NYSE:MCK) is a diversified healthcare products company that sells surgical products, pharmaceuticals, and services that enable healthcare professionals and others to distribute medicines. Given that McKesson Corporation (NYSE:MCK) is one of the biggest firms of its kind as it serves more than 2.1 million people, the firm can benefit from trends in the pharmacy industry. The biggest such trend is for weight loss drugs, and with pharma giants continuing to develop new weight loss drugs and prepare to negotiate with Medicare and Medicaid for existing treatments, McKesson Corporation (NYSE:MCK) could see tailwinds to revenue stemming from greater weight loss coverage. However, the shares have gained a modest 8.76% year to date on the back of weak earnings performance. McKesson Corporation (NYSE:MCK)’s first and second calendar quarter financials saw it post $68.79 billion and $71.7 billion in revenue, respectively. These missed analyst estimates of $71.65 billion and $74.1 billion. After the Q2 report, the stock dropped by 11.34% and by an additional 9.9% in September after McKesson Corporation (NYSE:MCK) announced that it was selling its Canadian pharmacy and eCommerce businesses. Any further earnings weakness could spell more trouble for the shares.

Baron Funds mentioned McKesson Corporation (NYSE:MCK) in its Q2 2024 investor letter. Here is what the fund said:

“McKesson is a leading distributor of pharmaceuticals and medical supplies and also provides prescription technology solutions that connect pharmacies, providers, payers, and biopharmaceutical customers. McKesson’s stock reacted positively to the company’s fiscal year 2025 earnings guidance, which came in ahead of investor expectations. We continue to think McKesson can generate mid-teens earnings per share growth annually through organic growth, operating leverage, and share repurchases.”