© 2009 Northern Trust Corporation northerntrust.com FALL FOCUS 2009 INVESTMENT CONFERENCE Michael Drucker Senior Equity Analyst Healthcare Sector Healthcare Services, Medical Devices & Hospital Supplies
Feb 01, 2016
© 2009 Northern Trust Corporation northerntrust.com
FALL FOCUS
2009
INVESTMENT CONFERENCE
Michael DruckerSenior Equity Analyst
Healthcare SectorHealthcare Services, Medical Devices & Hospital Supplies
2 2009 Fall FOCUS Investment Conference
HealthcarePerformance
Currency headwind
Concerns on sustainability of pricing
Hospital capital freeze
Obamacare
Performance Review – Healthcare Equipment
-50.0%
-45.0%
-40.0%
-35.0%
-30.0%
-25.0%
-20.0%
-15.0%
-10.0%
-5.0%
0.0%
Sep
-08
Oct
-08
Nov
-08
Dec
-08
Jan-
09
Feb
-09
Mar
-09
Apr
-09
May
-09
Jun-
09
Jul-0
9
Aug
-09
Ind
ex
ed
To
tal R
etu
rn
S&P 500 Healthcare Equipment
3 2009 Fall FOCUS Investment Conference
HealthcarePreferred Stocks
Covidien (COV, 1/B)
McKesson (MCK, 1/B)
Healthcare Services, Medical Devices & Hospital Supplies
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)
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)
© 2009 Northern Trust Corporation northerntrust.com
FALL FOCUS
2009
INVESTMENT CONFERENCE
Questions for Healthcare?
© 2009 Northern Trust Corporation northerntrust.com
FALL FOCUS
2009
INVESTMENT CONFERENCE
Michael DruckerSenior Equity Analyst
Thank you.