McKesson (NYSE:MCK), the largest drug distributor in the nation, sliced 50 basis points from the Fund’s return, as the stock declined 20.3% from $197.23 to $157.25. The stock moved lower after management provided weaker-than-expected guidance due to weaker generic drug prices. McKesson also lost some drugstore customers, as several chains were acquired by firms using other distributors. Despite these headwinds, we expect revenue to recover through organic growth and attracting new customers. McKesson provides significant value to consumers by improving the efficiency of drug procurement and delivery, which we believe will generate shareholder value over the long term.
From the Parnassus Fund first quarter 2016 shareholder letter.
