Investors are scrambling to buy companies that can profit no matter what happens in the global economy next. For U.S. investors, companies that manufacture their products domestically are stronger plays than those that produce overseas.
These safe-haven plays are seeing some traction as global tariff rates rise substantially. They may continue to hold up in the months ahead. But an even better play may be service-oriented companies away from manufacturing entirely.
Take, for instance, pharmaceutical distributor McKesson (MCK). The transporter of specialty drugs has been growing faster than the overall economy, and an aging population has higher need for drug delivery.
The rise of specialty weight loss drugs in recent years has also fueled sales, helping McKesson grow revenues by 17% and earnings by a hefty 49%.
Even with shares up 33% over the past year, and trending higher amid the latest market selloff, McKesson still trades at a reasonable 19 times forward earnings.
Action to take: Momentum investors in particular may like shares here, as well as long-term growth investors.
McKesson pays a dividend with a small 0.4% yield, but it is building a history of growing that payout.
For traders, the June $880 calls, last trading for about $27.50, have the most open interest. Traders can likely see mid-double-digit returns from a further rally in shares here.
Disclosure: The author of this article has no position in the company mentioned here, but may trade after the next 72 hours. The author receives no compensation from any company mentioned in this article.