5-Star Stocks Poised to Pop: McKesson

By Brian D. Pacampara | More Articles
December 30, 2011 | Comments (1)

Based on the aggregated intelligence of 180,000-plus investors participating in Motley Fool CAPS, the Fool's free investing community, pharmaceutical distributor McKesson (NYSE: MCK ) has earned a coveted five-star ranking.

With that in mind, let's take a closer look at McKesson's business and see what CAPS investors are saying about the stock right now.

McKesson facts

Headquarters (Founded)	San Francisco (1833)
Market Cap	$19.2 billion
Industry	Healthcare distributors
Trailing-12-Month Revenue	$117.3 billion
Management	Chairman/CEO John Hammergren CFO Jeffrey Campbell
Return on Equity (Average, Past 3 Years)	15.9%
Cash/Debt	$3.9 billion / $4.0 billion
Dividend Yield	1%
Competitors	AmerisourceBergen (NYSE: ABC ) Cardinal Health (NYSE: CAH ) Owens & Minor (NYSE: OMI )

Sources: S&P Capital IQ and Motley Fool CAPS.

On CAPS, 96% of the 606 members who have rated McKesson believe the stock will outperform the S&P 500 going forward. These bulls include Nalakensho and ladedodi.

Earlier this month, Nalakensho took the "buy what you know" approach and got bullish on the stock: "We order everything [from] McKesson. Can't run a health care office or hospital without it. They are not going anywhere."

McKesson even sports a cheapish price-to-cash flow of 6.7. That represents a discount to competitors like AmerisourceBergen (8.8), Cardinal Health (8.4), and Owens & Minor (29.2).

CAPS member ladedodi elaborates on the bull case:

The fundamental story is that McKesson is in the business of providing management products to the health care industry. Last year's health care reform law could bring many new patients into the system therefore increasing the demand for their products. That gives you a decent argument for good growth fundamentals. A value investor may also argue that the stock is already cheap.

What do you think about McKesson, or any other stock for that matter? If you want to retire rich, you need to put together the best portfolio you can. Owning exceptional stocks is a surefire way to secure your financial future, and on Motley Fool CAPS, thousands of investors are working every day to find them. CAPS is 100% free, so get started!

Want to see how well (or not so well) the stocks in this series are performing? Follow the new TrackPoisedTo CAPS account.

The Steve Jobs Betrayal
You may already know that in the final year of his life, Jobs revealed a stunning betrayal — and told his biographer, "I will spend my last dying breath... and every penny of Apple's $40 billion in the bank to right this wrong." What was it that made Jobs so irate — and why could it make a few in-the-know investors some major profits over the coming months and years?

Enter your email address below to find out what made Jobs so enraged!

Fool contributor Brian Pacampara owns no position in any of the companies mentioned. Motley Fool newsletter services have recommended buying shares of McKesson. Try any of our Foolish newsletter services free for 30 days.

We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Fool's disclosure policy always gets a perfect score.

Read/Post Comments (1) | Recommend This Article (3)

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment icon found on every comment.

Report this Comment On January 02, 2012, at 6:34 PM, denpete wrote:

Good company is a strong market, with the most overpaid CEO in America. Trend should generally be up but continued uncertainty over healthcare reform may make the stock volatile until mid 2013.
Good diversity of products and markets within healthcare. Should be able to pass on price increases as inflation returns. Most contracts are cost plus. Several large drugs coming off of patent this year may lower gross sales a little but will increase profitability and return to the bottom line.

Add your comment.

Compare Brokers

Fool Disclosure

DocumentId: 1750547, ~/Articles/ArticleHandler.aspx, 5/27/2012 2:01:21 AM

Report This Comment

Use this area to report a comment that you believe is in violation of the community guidelines. Our team will review the entry and take any appropriate action.

Sending report...

Today's Market

updated 1 day ago Sponsored by:
	DOW	12,454.83	-74.92	-0.60%
	S&P 500	1,317.82	-2.86	-0.22%
	NASD	2,837.53	-1.85	-0.07%

Create My Watchlist

Go to My Watchlist

You don't seem to be following any stocks yet!

Better investing starts with a watchlist. Now you can create a personalized watchlist and get immediate access to the personalized information you need to make successful investing decisions.

Data delayed up to 5 minutes