NYSE:MCK
$60.75
(3/15 6:40PM)
-0.5%
| Open | $61.04 |
Mkt Cap | $16.5 Billion |
| High | $61.2 |
52Wk High | $64.98 |
| Low | $60.55 |
52Wk Low | $33.13 |
| Volume | 1.5 Million |
Avg Vol 10D | 1.8 Million |
Ockham's Rating/Recommendation Summary
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MCK Revenue
For a long time, value investors have used the current share price relative to sales per share levels as an important valuation tool. We utilize a historical weighted average methodology that treats recent years more importantly in the calculation. When looking at MCK through this framework, we can see that our weighted average historical high and low Price to Sales per share ratios over the last 10 years are 0.23x and 0.14x respectively.
Utilizing this range we can see that MCK’s current Price to Sales per share ratio of 0.15x is well below its normal historic Price to Sales levels. At a price of $61.08, MCK is 18% below where we would expect to see it. Clearly, this stock looks undervalued compared to historical levels, at least on a Price to Sales basis. This will positively affect our analysis because it is rare to find a stock this far below historical norms, and we would expect some price appreciation to bring this metric back towards a more normal range.
MCK Cash Earnings
Looking at MCK specifically in their Cash Earnings capabilities, Ockham views MCK as significantly below its historical average multiple of cash earnings as calculated by Ockham. Similar to our analysis of sales per share, Ockham looks at the last 10 years of cash earnings levels for MCK to identify where the current high and low price levels have been historically in relation to profit per share. Again, we utilize a weighted average methodology which relies more heavily on recent years of data. This weighted average framework provides us with an average high Price to Cash Earnings ratio per share of 24.07 and a 15.16 low over the same period.
Now that MCK’s current price is $61.08 and its Price to Cash Earnings ratio is 9.93, we are very positive on its outlook from the cash earnings perspective. In fact, MCK is now trading a full 50% below its average historical Price to Cash Earnings ratio at these profit per share levels. When our clients ask us why MCK has great long term potential, the Cash Earnings levels to current stock is one of our primary reasons. But naturally, now we need for the overall market to recognize this disparity.
MCK Dividends
A strong dividend payment history is looked upon as a favorable characteristic on a company’s future and potentially can receive a positive Ockham rating. That being said, we don't require dividend payments for company's whose management has elected to forgo them entirely.
When reviewing dividend yields for MCK, we compare the historic high and low levels over the past, which is similar to our evaluation of Sales and Cash Earnings per share. Paying a dividend is not necessary for any company, but changes in dividend often can lend clues as to the health of the business. A rising dividend is a strong sign for an established company, as it reflects management's confidence in the company. MCK’s estimated annual dividend is $0.48 resulting in a current dividend yield of 0.79%. The highest dividend yield from MCK over recent history was 1.48% while the lowest dividend yield was 0.35%. Management at MCK needs to get the current dividend yield above the historical median before we are comfortable from this point of view.
Sales Growth at McKesson Corporation Discussed on Power Lunch
RazorWire keeps tabs on the important news investors should be aware of; today, MCK growth was the focus on Power Lunch.
Crowd sentiment is favorable on this stock, as measured by the Motley Fool CAPS survey. When taking into account the amount of news coverage each stock normally sees as a percentage of the total, McKesson Corporation has actually sunk a bit in comparison to the others. At present, Ockham has a valuation stance of Undervalued on MCK, as we could see significant price appreciation based on current fundamentals like cash earnings and revenue.
“… MCKESSON is taking it hard. Abc amerisourcebergen, a competitor and cardinal health also weaker here today. MCKESSON with a big 3% giveback which is unusual for this stock. …”
News Breaking on McKesson Corporation on Squawk On The Street
The latest news on Squawk On The Street in regards to MCK came through on RazorWire recently.
As we analyze the results from RazorWire, one thing we do is rank each stock in terms of amount of news coverage. Recently, MCK has been less covered in the news compared to the rest of our universe of stocks. The Motley Fool CAPS data suggests that investors believe McKesson Corporation will beat the market in the foreseeable future. We consider MCK as Undervalued at the current price of $62.09. According to our methodology, this stock has appreciation potential based on current fundamentals which only improves if earnings or revenue surprise.
“… That's the worst single day drop that MCKESSON has had in seven months. It's a health care distributer, competes with cardinal health for example but you don't see this stock ... …”
See Who is Talking About News from MCK on Fox Business
Staying informed on the news is invaluable for investors, and RazorWire has captured a recently discussion on MCK from Fox Business.
At present, Ockham has a valuation stance of Undervalued on MCK, as we could see significant price appreciation based on current fundamentals like cash earnings and revenue. Crowd sentiment is favorable on this stock, as measured by the Motley Fool CAPS survey. When taking into account the amount of news coverage each stock normally sees as a percentage of the total, McKesson Corporation has actually sunk a bit in comparison to the others.
“… One of the companies we like trades in hong kong, signo farm like the MCKESSON, which is the drug distributor here in the as drugs continue to dproe this company sinno pharm ... …”
MCK News Mentioned on The Call Recently
The latest news on The Call in regards to MCK came through on RazorWire recently.
Based on our methodology, McKesson Corporation should hold some appeal to value investors as we view it as Undervalued. Crowd sentiment is leaning to the bearish side, according to the robust data set collected by the Motley Fool CAPS survey. Ranking all stocks in terms of news coverage offers some interesting data. In the case of MCK, it is getting significantly more attention in recent news coverage than we are used to seeing.
“… Near term medco and MCKESSON are more timely. MCKESSON gets 20% of its earnings from health care i. T. > > we appreciate it. Thank you so much for joining us > > > …”
See More News on MCK from The Call
The latest news on The Call in regards to MCK came through on RazorWire recently.
The Motley Fool CAPS data suggests that investors believe McKesson Corporation will beat the market in the foreseeable future. When looking at our entire coverage universe and ranking stocks by the attention they receive on RazorWire, it is clear that McKesson Corporation has been talked about more than normal recently. We consider MCK as Undervalued at the current price of $63.37. According to our methodology, this stock has appreciation potential based on current fundamentals which only improves if earnings or revenue surprise.
“… MCKESSON and medco will also benefit by use of people who use prescription drugs. > > certain red flags you'd be looking for that mean that stocks could break out? > > …”
McKesson Corporation (MCK) Discussed on CNBC's Closing Bell
McKesson Corporation is in the news. Find out how this impacts MCK trading on Ockham Research.
Tenet health care ceo says with rising unemployment he expects to see more with bad debt. Still a good gainer, up 2.5%. The medical supply distributors continue to mark new highs, MCKESSON and cardinal health are coming up with supplies to fight the flu. Google with a locate tor search pharma stocks up. Baxter gained over the last five sessions, up after boosting dividend from 29 cents to 29 cents a share. The hmos, remember the house passed that big bill, they gained 12%. Coventry health, wellpoint and humana up five days in a row as the timeline for any health reform bill in both houses will likely extend into next year. Maria, that timeline shifts every other week it seems. Right now it looks like it is stretching out. >> this market shifting as we are facing the last few moments before the closing bell sounds. Simon, it looks to me like the bank and brokers are rolling over in the final few minutes of trading and you have a mixed performance within the oil that is creating some limitations for the market. Oil prices are down and as I mentioned all the bank were higher fractionally. J.P. Morgan is a dow component, that turned over, citigroup is
“… Google with a locate tor search pharma stocks up. Baxter gained over the last five sessions, up after boosting dividend from 29 cents to 29 cents a share. The hmos, remember the house passed that big bill, they gained 12%. Coventry health, wellpoint and humana up five days in a row as the timeline for any health reform bill in both houses will likely extend into next year. Maria, that timeline shifts every other week it seems. Right now it looks like it is stretching out. >> this market shifting as we are facing the last few moments before the closing bell sounds. Simon, it looks to me like the bank and brokers are rolling over in the final few minutes of trading and you have a mixed performance within the oil that is creating some limitations for the market. Oil prices are down and as I mentioned all the bank were higher fractionally. J.P. Morgan is a dow component, that turned over, citigroup is …”
McKesson Corporation (MCK) Discussed on CNBC's Squawk On The Street
McKesson Corporation is in the news. Find out how this impacts MCK trading on Ockham Research.
It's mlr dropped 140 basis company also sees higher utilization because of the flu. Meantime MCKESSON beat on sales. They're boosting the 2010 guide dance because of expected high h1n1 volume the cdc is using to distribute the flu vaccine and back to you, erin. Thank you very much. >>> visa, mark mentioned it, one of the most clicked on stocks on of course, it is the operator of
“… erin. Thank you very much. >>> visa, mark mentioned it, one of the most clicked on stocks on of course, it is the operator of …”
McKesson Corporation (MCK) Discussed on Fox Business's Fox Business
McKesson Corporation is in the news. Find out how this impacts MCK trading on Ockham Research.
>> brian: spend more money apparently the way we do it. >> for two of our holdings are cerner and MCKESSON and they've been strong contributors, we were in there ahead of the announcement in february. >> dagen: do you see government involvement existing and continuing involvement in financial services business ahead when-- are you still light in financial >> yes and yes, and really, what we see happening is much more of
“… and continuing involvement in financial services business ahead when-- are you still light in financial >> yes and yes, and really, what we see happening is much more of …”
McKesson Corporation (MCK) Discussed on CNBC's Power Lunch
McKesson Corporation is in the news. Find out how this impacts MCK trading on Ockham Research.
First time home buyer sunset, november 30th or does it and not as that volatility plays out, there's going to be just fabulous opportunities to scalp these stocks the same way there was with united health and MCKESSON. In the third quarter we'll get that out of toll brothers and all the rest in this quarter. >> let's hone in on the other part of the trade you had mentioned that. Is the insurers. That's another sector that's moving based on those same pelosi comments. Earlier in the press conference she addressed windfall profit the fact insurers as well as over players in the industry have more to bring to the table in order to reduce costs on health care for all. We're seeing that group all trading lower, practically at session lows. J.J. For some time we have seen the volatility low. The options were the smarter way is that still the case? >> absolutely it is, even though volatility has risen. The insurers are proverbial rented mule. Everybody is kicking them and abusing tem right now. The better way to play them I would think would be to buy puts or sell upside call spreads. Giving yourself a chance to be wrong and still make some money on them.
“… out of toll brothers and all the rest in this quarter. >> let's hone in on the other part of the trade you had mentioned that. Is the insurers. That's another sector that's moving based on those same pelosi comments. Earlier in the press conference she addressed windfall profit the fact insurers as well as over players in the industry have more to bring to the table in order to reduce costs on health care for all. We're seeing that group all trading lower, practically at session lows. J.J. For some time we have seen the volatility low. The options were the smarter way is that still the case? >> absolutely it is, even though volatility has risen. The insurers are proverbial rented mule. Everybody is kicking them and abusing tem right now. The better way to play them I would think would be to buy puts or sell upside call spreads. Giving yourself a chance to be wrong and still make some money on them. …”
McKesson Corporation (MCK) Discussed on CNBC's Fast Money
McKesson Corporation is in the news. Find out how this impacts MCK trading on Ockham Research.
In large part because of health what's proven out this year is even in a weak economy health care demand has been very prescription drugs. Most of the stocks we see in health care are better longs than shorts. We'd also highlight drug distribution companies and pbms like MCKESSON and medco. >> we had david snow from medco health on monday. He wouldn't commit to it but are they going to buy aetna's pbm business and if she do is it a big deal for them? I think medco's a great stock. Would that heap them? >> i've been a long-time proponent of managed care plans selling their pbms. I think medco and others would continue to purchase the pbms of health plans. >> how about cigna? Is this the worst possible scenario for them? How do they line up in this? >> cigna and aetna both likely will sell their pvns and it will
“… es and pbms like MCKESSON and medco. >> we had david snow from medco health on monday. He wouldn't commit to it but are they going to buy aetna's pbm business and if she do is it a big deal for them? I think medco's a great stock. Would that heap them? >> i've been a long-time proponent of managed care plans selling their pbms. I think medco and others would continue to purchase the pbms of health plans. >> how about cigna? Is this the worst possible scenario for them? How do they line up in this? >> cigna and aetna both likely will sell their pvns and it will …”