Core Insights - Medical supplies stocks are typically not seen as high-return investments due to thin margins and regulatory pressures, making outperformance unlikely in a challenging macro environment [1] - However, companies like Cardinal Health, McKesson, and Cencora have achieved significant stock returns over the past year, outperforming the broader market with gains of 66.4%, 39.5%, and 42.2% respectively [2] Company Performance Cardinal Health - Cardinal Health has shown a turnaround with double-digit operating earnings growth across all segments in Q1 of fiscal 2026, indicating broad improvement [4][8] - Revenues increased by 22% year over year to $64 billion, driven by strong pharmaceutical demand and GLP-1 volumes, with the Pharmaceutical and Specialty Solutions segment profit rising by 26% [5] - The company is expanding its specialty business, including the acquisition of Solaris Health, aimed at enhancing provider relationships [6][8] - Cardinal Health generated $1.3 billion in adjusted free cash flow and returned $500 million to shareholders through dividends and buybacks [9] McKesson - McKesson reported 10% revenue growth to $103 billion and 39% adjusted EPS growth in Q2 of fiscal 2026, showcasing its operational excellence [11] - The Oncology and Multispecialty segment saw revenues jump by 32% and operating profit surge by 71%, driven by strong specialty volumes and acquisitions [12] - The company generated $2.2 billion in free cash flow and returned $907 million to shareholders, primarily through share repurchases [13] Cencora - Cencora's performance reflects the strength of specialty-focused distribution, with 6% revenue growth and 15% adjusted EPS growth in Q4 of fiscal 2025 [16] - Operating income rose by 20% year over year, supported by strong specialty demand and the acquisition of Retina Consultants of America [17] - The company plans to invest approximately $1 billion through 2030 to enhance distribution capacity and cold-chain infrastructure [18]

Core Viewpoint - Owens & Minor has agreed to sell its Products & Healthcare Services (P&HS) segment to Platinum Equity for $375 million in cash, allowing the company to focus on home-based care operations [1][4]. Group 1: Transaction Details - The sale price for the P&HS segment is $375 million in cash, with Owens & Minor retaining a 5% equity stake and over $150 million in tax attributes [1][2]. - The transaction will be finalized by the end of the year, pending regulatory review and customary closing conditions [4]. - Owens & Minor will receive the cash payment at closing, subject to adjustments for transaction expenses, working capital, and net debt [2]. Group 2: Business Focus and Strategy - The P&HS segment operates as a vertically integrated platform for distributing medical supplies, primarily serving the acute-care market [2]. - The sale is part of Owens & Minor's strategic transformation into a leading, pure-play home-based care platform, as stated by the company's president and CEO Edward Pesicka [3][4]. - The company aims to drive more value for its patient direct stakeholders through this transformation [4]. Group 3: Future Prospects - Owens & Minor will retain a preferred equity return, which may allow it to receive a portion of future divestiture proceeds [3]. - Platinum Equity's co-president expressed confidence in the future of the P&HS segment and the partnership with Owens & Minor [5].