McKesson Corp (NYSE:MCK)

CAPS Rating: 4 out of 5

Providing supply, information and care management products and services designed to reduce costs and improve quality across the healthcare industry.

Recs

5
Player Avatar dilettantedude (96.14) Submitted: 11/9/2006 8:48:52 AM : Outperform Start Price: $48.20 MCK Score: +81.09

Three things are driving McKesson: rapid development of new drugs; demographics; and Medicare Part D. ROIC is high, and the company is selling for only half its estimated fair value based on discounted free cash flow. Their transition to a fee-for-service business model, which hurt the distribitors last year, appears to have been very successful in boosting margins and ROIC, so the reason for the drop in price seems to be behind them.

Featured Broker Partners


Advertisement