We came across a bullish thesison McKesson Corporation on Value investing subreddit by entropybender. In this article, we will summarize the bulls’ thesis on MCK. McKesson Corporation’s share was trading at $711.42 as of September 12th. MCK’s trailing and forward P/E were 28.49 and 18.94 respectively according to Yahoo Finance.
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McKesson Corporation (MCK) is resuming its uptrend after a correction, presenting a compelling investment opportunity. The company is the dominant player in U.S. pharmaceutical distribution, handling roughly one-third of all drugs in the country. This scale provides McKesson with strong competitive moats, pricing power, and steady cash flow, making it a critical “toll road” of American healthcare. Despite this, the market is undervaluing the company, focusing narrowly on its seemingly thin 1% margins rather than its exceptional returns on capital and consistent free cash flow generation.
Trading at just 16.5x free cash flow while growing earnings at approximately 13% annually, McKesson offers a highly attractive risk/reward profile. The company’s demographic tailwinds ensure continued demand growth, and its strategic pivot into higher-margin oncology services positions it for even stronger profitability over time. For long-term investors, this combination of predictable cash flow, industry dominance, and growth initiatives suggests compounded wealth creation at an estimated 10–12% annually, with minimal downside risk.
Conservatively, at the current stock price, an investment of $10,000 effectively purchases $607 of owner’s earnings that are expected to compound at roughly 8.6%, highlighting both the undervaluation and resilience of the business. Overall, McKesson offers a rare opportunity to invest in a recession-resilient healthcare infrastructure business with robust cash generation, high returns on capital, and structural growth catalysts, making it attractive for patient, long-term-oriented investors seeking steady compounding and capital preservation.
Previously we covered a bullish thesis on Quipt Home Medical Corp. (QIPT) by Inflexio Research in March 2025, which highlighted the company’s recurring revenue, strong position in home healthcare equipment, and potential for a strategic sale. The company’s stock price has appreciated approximately by 16.95% since our coverage as initial headwinds eased and fundamentals improved. The thesis still stands as activist involvement and policy tailwinds continue to support upside. Entropybender shares a similar perspective but emphasizes McKesson’s scale, robust free cash flow, and low risk compounding potential.
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