Based on the aggregated intelligence of 145,000-plus investors participating in Motley Fool CAPS, the Fool's free investing community, drug distributor McKesson
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 |
$16.6 billion |
|
Industry |
Health-care providers and services |
|
Trailing-12-Month Revenue |
$107.1 billion |
|
Management |
CEO John Hammergren (since 2000) |
|
Return on Equity (Average, Past 3 Years) |
15.2% |
|
Cash/Debt |
$3.2 billion / $2.5 billion |
|
Competitors |
Cardinal Health |
|
CAPS Members Bullish on MCK Also Bullish on |
Johnson & Johnson |
|
CAPS Members Bearish on MCK Also Bearish on |
Amazon.com |
Sources: Capital IQ (a division of Standard & Poor's) and Motley Fool CAPS.
On CAPS, 95.2% of the 501 members who have rated McKesson believe the stock will outperform the S&P 500 going forward. These bulls include yankeepride and All-Star MagicDiligence.
This past fall, yankeepride kindly informed Fools that McKesson "has a stable senior management team, has been on a tear for a while now, and is in a market sector that is growing on a massive scale."
In a more detailed pitch from last month, MagicDiligence also prescribed the stock. Here's an excerpt:
Solid arguments can be made for all three of the primary factors I look for: growth potential, competitive position, and financial health. Let's take a look at each.
First, growth potential. ... The federal government has focused on reducing healthcare costs, and the expanded use of information technology to improve the efficiency of data management will benefit McKesson. ...
The firm also has a very strong competitive position. McKesson is one of only 3 major pharmaceutical distributors, the other two being Cardinal Health (CAH) and AmerisourceBergen (ABC). Operating margins are very low in this business (barely over 1%), making economies of scale a major roadblock to new competitors. It is unlikely that the existing oligarchy will be broken any time soon. ...Financially, the firm is in good condition. ... Drug distribution is a reliable business, largely recession-proof, and with over a billion in annual free cash flow, financial health is fine.
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