McKesson Inc. (MCK): Today's Featured Wholesale Laggard

Editor's Note: TheStreet ratings do not represent the views of TheStreet's staff or its contributors. Ratings are established by computer based on metrics for performance (which includes growth, stock performance, efficiency and valuation) and risk (volatility and solvency). Companies with poor cash flow or high debt levels tend to earn lower ratings in our model.

McKesson ( MCK) pushed the Wholesale industry lower today making it today's featured Wholesale laggard. The industry as a whole closed the day down 0.3%. By the end of trading, McKesson fell $2.92 (-2.7%) to $106.87 on heavy volume. Throughout the day, 4.6 million shares of McKesson exchanged hands as compared to its average daily volume of 1.4 million shares. The stock ranged in price between $104.52-$108.99 after having opened the day at $107.95 as compared to the previous trading day's close of $109.79. Other companies within the Wholesale industry that declined today were: Cardinal Health ( CAH), down 8.2%, Rada Electronics Industries ( RADA), down 7.3%, China Auto Logistics ( CALI), down 5.1%, and China Metro-Rural Holdings ( CNR), down 4.8%.
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McKesson Corporation, together with its subsidiaries, delivers pharmaceuticals, medical supplies, and health care information technologies to the healthcare industry primarily in the United States. It operates in two segments, McKesson Distribution Solutions and McKesson Technology Solutions. McKesson has a market cap of $25.73 billion and is part of the services sector. The company has a P/E ratio of 16.8, below the S&P 500 P/E ratio of 17.7. Shares are up 13.2% year to date as of the close of trading on Monday. Currently there are seven analysts that rate McKesson a buy, no analysts rate it a sell, and five rate it a hold.

TheStreet Ratings rates McKesson as a buy. The company's strengths can be seen in multiple areas, such as its solid stock price performance, revenue growth, notable return on equity, growth in earnings per share and largely solid financial position with reasonable debt levels by most measures. We feel these strengths outweigh the fact that the company shows weak operating cash flow.

On the positive front, Hudson Technology ( HDSN), up 7%, AmerisourceBergen ( ABC), up 3.6%, Chindex International ( CHDX), up 2.7%, and Shengkai Innovations ( VALV), up 2.3%, were all gainers within the wholesale industry with Sysco Corporation ( SYY) being today's featured wholesale industry leader.

For investors not wanting singular stock exposure, ETFs may be of interest. Investors who are bullish on the wholesale industry could consider iShares Dow Jones US Cons Goods ( IYK) while those bearish on the wholesale industry could consider ProShares Ultra Sht Consumer Goods ( SZK).

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