Conventum - Alluvium Global Fund on McKesson Corporation
Thesis
Alluvium added to McKesson after results came in line with its expectations and management issued strong forward guidance. Management reiterated long-term earnings growth expectations of 13%-16%, while the fund's updated model increased its valuation estimate by 18%. The business is viewed as a structural franchise and a backbone of the U.S. pharmaceutical supply chain, generating relatively steady and non-cyclical cash flow. Because the share price remained below the revised valuation, the fund increased its position to 6.8%.
“our valuation increased by 18%, and with the share price trading below it, we bought a little more”