Trade-Ideas: McKesson (MCK) Is Today's New Lifetime High Stock

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 McKesson ( MCK) as a new lifetime high 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 $137.7 million.
  • MCK has traded 2,500 shares today.
  • MCK is trading at a new lifetime high.

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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 33.8. Currently there are 11 analysts that rate McKesson a buy, no analysts rate it a sell, and 2 rate it a hold.

The average volume for McKesson has been 1.0 million shares per day over the past 30 days. McKesson has a market cap of $45.2 billion and is part of the services sector and wholesale industry. The stock has a beta of 0.89 and a short float of 0.7% with 2.75 days to cover. Shares are up 20.8% year-to-date as of the close of trading on Friday.

STOCKS TO BUY: TheStreet Quant Ratings has identified a handful of stocks that can potentially TRIPLE in the next 12 months. Learn more.

TheStreetRatings.com Analysis:

TheStreet Quant Ratings rates McKesson as a buy. The company's strengths can be seen in multiple areas, such as its robust revenue growth, solid stock price performance and notable return on equity. We feel these strengths outweigh the fact that the company has had sub par growth in net income.

Highlights from the ratings report include:
  • The revenue growth came in higher than the industry average of 20.6%. Since the same quarter one year prior, revenues rose by 36.7%. This growth in revenue does not appear to have trickled down to the company's bottom line, displayed by a decline in earnings per share.
  • MCKESSON CORP' earnings per share from the most recent quarter came in slightly below the year earlier quarter. This company has reported somewhat volatile earnings recently. But, we feel it is poised for EPS growth in the coming year. During the past fiscal year, MCKESSON CORP increased its bottom line by earning $5.86 versus $5.62 in the prior year. This year, the market expects an improvement in earnings ($10.81 versus $5.86).
  • Compared to its closing price of one year ago, MCK's share price has jumped by 59.28%, exceeding the performance of the broader market during that same time frame. We feel that the stock's sharp appreciation over the last year has driven it to a price level which is now somewhat expensive compared to the rest of its industry. The other strengths this company shows, however, justify the higher price levels.
  • The company's current return on equity has slightly decreased from the same quarter one year prior. This implies a minor weakness in the organization. Compared to other companies in the Health Care Providers & Services industry and the overall market, MCKESSON CORP's return on equity exceeds that of both the industry average and the S&P 500.
  • The gross profit margin for MCKESSON CORP is currently extremely low, coming in at 6.99%. Regardless of MCK's low profit margin, it has managed to increase from the same period last year. Despite the mixed results of the gross profit margin, the net profit margin of 0.91% trails the industry average.

STOCKS TO BUY: TheStreet Quant Ratings has identified a handful of stocks that can potentially TRIPLE in the next 12 months. Learn more.

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