Tag: McKesson Corporation (NYSE:MCK)

Overview

McKesson Corporation (NYSE:MCK) recently reported Q2 2017 numbers that missed analysts’ expectations on both EPS and revenue, missing by $0.11 per share and $1.25 billion, respectively. This was the fourth consecutive quarter in which McKesson has missed revenue targets. As a result of the most recent miss, shares of McKesson sank by ~$40 per share or 23% beginning in after-hours trading and through the next trading day (Figure 1). In February I wrote a piece on McKesson stating that I felt McKesson presented a buying opportunity when the stock sank to a 52-week low of $148 per share. As that call began to come to fruition, I wrote a series of follow-up articles voicing caution as the share price appreciated. On March 21st I framed my thesis as being well intact as the shares appreciated to the mid $150s. On May 29th I stated that concerns remained despite the solid Q4 2016 quarterly earnings as shares appreciated to the low $180s. On July 20th I stated that shares had appreciated 34% by reaching the ~$200 level and at that point, I was hesitant due to pressures regarding the pharmaceutical supply chain and earnings from other pharmaceutical wholesalers such as Cardinal Health. At the writing of the July 20th article, I had relinquished my position in McKesson due to the run-up in share price and the growing concerns of the business model in combination with social and political pressures.

Figure 1 – McKesson’s free fall after missing Q2 2017 earnings and lowering guidance

Continue reading "McKesson Craters - Misses Q2 2017 Estimates and Lowers Guidance" →

Introduction

McKesson Corporation (NYSE:MCK) fell to a 52-week low back in February and has since surged 34%, appreciating from $148 to ~$200 per share as of mid-July. On February 16th, I published an article titled “McKesson Has Hit A 52-Week Low – Buying Opportunity” positing that McKesson has put in place a string of positive shareholder friendly maneuvers to position itself for future growth and break out of its slump. McKesson had hit a 52-week low and boasted a P/E of 16 and a PEG of 1.46 at the time. McKesson appeared very attractive considering its EPS growth, dividend payout, acquisitive mindset and share buyback program. Now that the stock has nearly breached the $200 level thus appreciating over 34%, now what? Continue reading "McKesson Jumps 34% Off Lows - Now What?" →

Introduction

McKesson Corporation (NYSE:MCK) has been faced with a challenging healthcare landscape as political posturing, drug pricing scrutiny, overall sentiment towards pharmaceutical companies due to price gouging allegations and the overall rotation out of healthcare related stocks. This confluence of events has plagued McKesson’s stock, falling from $241 to $148 or 39% in just 9 months from May of 2015 through February 2016. MCK has been on an acquisition spree as of late and announced layoffs of 1,600 workers or about 4% of its U.S. workforce. These collective efforts are aimed to stem any losses in revenue from a hit to its customer base while continuing to drive value for shareholders. McKesson has acquired two medical firms that focus in oncology for a total of $1.2 billion and Ontario-based Rexall Health for $2.2 billion. McKesson is being proactive and aligning its cost structure in a fiscally responsible manner in order to remain competitive and add value to shareholders. At the writing of my previous article covering McKesson, it had hit a 52-week low of ~$150 in March. Since then, the stock has been on an uptick to current levels at $182 or 20% rise in its stock price. McKesson appears very attractive considering its EPS growth, dividend payout, acquisitive mindset and share buyback program however concerns remain. Continue reading "McKesson Posts Solid Fiscal Q4 Earnings - Concerns Remain" →

Introduction

McKesson Corporation (NYSE:MCK) has been on an acquisition spree as of late and announced layoffs of 1,600 workers or about 4% of its U.S. workforce. These collective efforts are aimed to stem any losses in revenue from a hit to its customer base while continuing to drive value for shareholders. McKesson has agreed to acquire two privately held medical firms that focus in oncology for a total of $1.2 billion. McKesson has also agreed to acquire Ontario-based Rexall Health for $2.2 billion in Canada. Layoffs are underway as well after the company determined “reductions in our workforce would be necessary to align our cost structure with our business model.” McKesson is being proactive and aligning its cost structure to in a fiscally responsible manner in order to remain competitive and add value to shareholders. After the recent political induced healthcare sell-off, many healthcare stocks look attractive at these levels, specifically McKesson. Once the political cycle is complete in 2016, these stocks will likely benefit from the mere absence of political headwinds. McKesson has hit a 52-week low and remains near that level and boasts a P/E of 16 and a PEG of 1.46. McKesson appears very attractive considering its EPS growth, dividend payout, acquisitive mindset and share buyback program. Continue reading "McKesson Goes On Acquisition Spree And Announces Layoffs" →