Editor's Note: Any reference to TheStreet Ratings and its underlying recommendation does not reflect the opinion of TheStreet, Inc. or any of its contributors including Jim Cramer or Stephanie Link.
Trade-Ideas LLC identified
) as a momo momentum candidate. In addition to specific proprietary factors, Trade-Ideas identified McKesson as such a stock due to the following factors:
- MCK has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $182.3 million.
- MCK has a PE ratio of 32.8.
- MCK is currently in the upper 30% of its 1-year range.
- MCK is in the upper 25% of its 20-day range.
- MCK is in the upper 35% of its 5-day range.
- MCK is currently trading above yesterday's high.
- MCK has experienced a gap between today's open and yesterday's close of 1%.
'Momo Momentum' stocks are valuable stocks to watch for a variety of reasons including historical back testing and price action. Market technicians refer to such stocks as being in a mark-up phase before a possible distribution period and price decline. Technical analysts and traders frequently find that the factors referenced above tend to create a temporary burst of strong wind in a stock's sail. Nevertheless, all successful traders must excel at maximizing gains while keeping losses to an absolute minimum. For that reason, the holding period on momo momentum stocks must always be a primary consideration, and this part of the puzzle is ultimately at the discretion of each individual's risk tolerance and portfolio risk management skills.
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More details on MCK:
McKesson Corporation delivers pharmaceuticals, medical supplies, and health care information technologies to the healthcare industry in the United States and internationally. The company operates in two segments, McKesson Distribution Solutions and McKesson Technology Solutions. The stock currently has a dividend yield of 0.5%. MCK has a PE ratio of 32.8. Currently there are 11 analysts that rate McKesson a buy, 1 analyst rates it a sell, and 2 rate it a hold.
The average volume for McKesson has been 1.2 million shares per day over the past 30 days. McKesson has a market cap of $44.3 billion and is part of the services sector and wholesale industry. The stock has a beta of 0.91 and a short float of 0.7% with 1.94 days to cover. Shares are up 18.5% year-to-date as of the close of trading on Wednesday.
rates McKesson as a
. The company's strengths can be seen in multiple areas, such as its revenue growth, growth in earnings per share, increase in net income, solid stock price performance and good cash flow from operations. We feel these strengths outweigh the fact that the company has had generally high debt management risk by most measures that we evaluated.
Highlights from the ratings report include:
- MCK's revenue growth has slightly outpaced the industry average of 16.0%. Since the same quarter one year prior, revenues rose by 25.0%. Growth in the company's revenue appears to have helped boost the earnings per share.
- MCKESSON CORP has improved earnings per share by 40.5% in the most recent quarter compared to the same quarter a year ago. The company has demonstrated a pattern of positive earnings per share growth over the past year. We feel that this trend should continue. During the past fiscal year, MCKESSON CORP increased its bottom line by earning $5.83 versus $5.62 in the prior year. This year, the market expects an improvement in earnings ($10.61 versus $5.83).
- The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Health Care Providers & Services industry. The net income increased by 43.2% when compared to the same quarter one year prior, rising from $259.00 million to $371.00 million.
- Powered by its strong earnings growth of 40.54% and other important driving factors, this stock has surged by 63.41% over the past year, outperforming the rise in the S&P 500 Index during the same period. Looking ahead, the stock's sharp rise over the last year has already helped drive it to a level which is relatively expensive compared to the rest of its industry. We feel, however, that other strengths this company displays justify these higher price levels.
- Net operating cash flow has increased to $2,664.00 million or 20.70% when compared to the same quarter last year. Despite an increase in cash flow, MCKESSON CORP's average is still marginally south of the industry average growth rate of 21.00%.
- You can view the full McKesson Ratings Report.