McKesson Story

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MCK -- USA Stock  

USD 146.56  3.53  2.35%

Considering the 90-days investment horizon, McKesson is expected to generate 1.37 times more return on investment than the market. However, the company is 1.37 times more volatile than its market benchmark. It trades about 0.08 of its potential returns per unit of risk. The DOW is currently generating roughly 0.11 per unit of risk. While some of us are excited about healthcare space, it makes sense to examine McKesson in greater detail to make a better estimate of its risk and reward. We will concentrate on why it could be a different year for McKesson shareholders. McKesson's low volatility may still impact the value of the stock as we estimate it as currently undervalued. The real value, based on our analysis, is getting close to 161.70 per share.
Published over a month ago
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Is McKesson (NYSE:MCK) a good hedge for your existing portfolios?
McKesson has roughly 4.02 B in cash with 4.37 B of positive cash flow from operations. This results in cash-per-share (CPS) ratio of 24.81.
Volatility is a rate at which the price of McKesson or any other equity instrument increases or decreases for a given set of returns. It is measured by calculating the standard deviation of the annualized returns over a given period of time and shows the range to which the price of McKesson may increase or decrease. In other words, similar to McKesson's beta indicator, it measures the risk of McKesson and helps estimate the fluctuations that may happen in a short period of time. So if prices of McKesson fluctuate rapidly in a short time span, it is termed to have high volatility, and if it swings slowly in a more extended period, it is understood to have low volatility. Please read more on our technical analysis page.

How important is McKesson's Liquidity

McKesson financial leverage refers to using borrowed capital as a funding source to finance McKesson ongoing operations. It is usually used to expand the firm's asset base and generate returns on borrowed capital. McKesson financial leverage is typically calculated by taking the company's all interest-bearing debt and dividing it by total capital. So the higher the debt-to-capital ratio (i.e., financial leverage), the riskier the company. Please check the breakdown between McKesson's total debt and its cash.

What do experts say?

Stock analysis is a method for investors and traders to make buying and selling decisions. By studying and evaluating past and current data, investors and traders attempt to gain an edge in the markets by making informed decisions. It is good to see analyst projects for McKesson, but it might be worth checking our own buy vs. sell analysis

McKesson Volatility Drivers

McKesson unsystematic risk is unique to McKesson and usually not directly affected by the market or economic environment. An example of unsystematic risk is the possibility of poor earnings or a layoff due to coronavirus. One may mitigate nonsystematic risk by buying different securities in the same industry or by buying in different sectors. For example, if you have a position in McKesson you can also buy AmerisourceBergen. You can also mitigate this risk by investing in the medical distribution sector as well as in companies having nothing to do with it. This type of risk is also called diversifiable risk and can be understood from analyzing McKesson important indicators over time. Here we run a correlation analysis between relevant fundamental ratios over at least ten year period to find a relationship in the way they react to changes in McKesson income statement and balance sheet. Here are more details about McKesson volatility.
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