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Michael Drucker Senior Equity Analyst

Healthcare Sector. Healthcare Services, Medical Devices & Hospital Supplies. Michael Drucker Senior Equity Analyst. Healthcare Performance. Performance Review – Healthcare Equipment. Currency headwind Concerns on sustainability of pricing Hospital capital freeze Obamacare.

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Michael Drucker Senior Equity Analyst

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  1. Healthcare Sector Healthcare Services, Medical Devices & Hospital Supplies Michael Drucker Senior Equity Analyst

  2. HealthcarePerformance Performance Review – Healthcare Equipment • Currency headwind • Concerns on sustainability of pricing • Hospital capital freeze • Obamacare

  3. HealthcarePreferred Stocks Healthcare Services, Medical Devices & Hospital Supplies • Covidien (COV, 1/B) • McKesson (MCK, 1/B)

  4. HealthcarePreferred Stocks Covidien (COV, 1/B) • 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

  5. HealthcarePreferred Stocks McKesson (MCK, 1/B) • 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)

  6. Questions for Healthcare?

  7. Thank you. Michael Drucker Senior Equity Analyst

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