In the past I've owned MCK, CAH, and KND. I like MCK and CAH because, along with ABC, they controlled the entire market. At the present time, MCK is the most interesting, but I can't stomach the CEO's pay, compared to CAH. Also, with greater consolidation of pharmacies comes greater price discounts to these companies.
In general, I'm not crazy about healthcare stocks as there are too many unknowns. Certainly the demographics are favorable, but the gov. is the big gorilla that will eventually dictate prices. KND has been hammered in the past when Medicare cut reimbursement for nursing homes. Is this caution already reflected in the stock prices? Perhaps. Nevertheless, I don't think there will be much PE expansion to these stocks. |
