Michael Drucker Senior Equity Analyst
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Transcript of Michael Drucker Senior Equity Analyst
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© 2009 Northern Trust Corporation northerntrust.com
FALL FOCUS
2009
INVESTMENT CONFERENCE
Michael DruckerSenior Equity Analyst
Healthcare SectorHealthcare Services, Medical Devices & Hospital Supplies
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2 2009 Fall FOCUS Investment Conference
HealthcarePerformance
Currency headwind
Concerns on sustainability of pricing
Hospital capital freeze
Obamacare
Performance Review – Healthcare Equipment
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S&P 500 Healthcare Equipment
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3 2009 Fall FOCUS Investment Conference
HealthcarePreferred Stocks
Covidien (COV, 1/B)
McKesson (MCK, 1/B)
Healthcare Services, Medical Devices & Hospital Supplies
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4 2009 Fall FOCUS Investment Conference
HealthcarePreferred Stocks
Spin-off From Tyco
Incentivized Management
Portfolio Restructuring
Sell slower growth, low ROIC businesses to add faster growth, high ROIC businesses
Prefer tuck-in acquisitions, but will return excess capital to shareholders
Leverage Infrastructure Investments
Capital Deployment Opportunity
Covidien (COV, 1/B)
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5 2009 Fall FOCUS Investment Conference
HealthcarePreferred Stocks
Leader in Pharmaceutical Distribution and Healthcare IT (HCIT)
Pharmaceutical Distribution stable with re-signing of CVS contract (15% of revenue)
HCIT upside from stimulus
Undervalued asset within McKesson
20% of operating income
$21 billion will be paid to doctors / hospitals to upgrade to electronic medical records (EMR)
McKesson (MCK, 1/B)
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© 2009 Northern Trust Corporation northerntrust.com
FALL FOCUS
2009
INVESTMENT CONFERENCE
Questions for Healthcare?
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© 2009 Northern Trust Corporation northerntrust.com
FALL FOCUS
2009
INVESTMENT CONFERENCE
Michael DruckerSenior Equity Analyst
Thank you.