MCK - McKesson: Time To Get More Cautious
2024-04-30 04:22:35 ET
Summary
- McKesson reported solid third-quarter results, but while revenue increased at a high pace, the bottom line is fluctuating.
- We can expect the company to grow its top line at least in the mid-single digits - fueled by GLP-1 medications - and share buybacks will continue.
- Although MCK stock could still be slightly undervalued, I would be very cautious at this point as a sentiment change in the coming quarters is likely.
McKesson Corporation ( MCK ) is one of the biggest mistakes I have made in the last few years. I did not lose any money, but I missed out on an opportunity I saw, but did not make the investment. In February 2018, I called McKesson one of the cheapest stocks in the market (267% return since then compared to 92% of the S&P 500). And in August 2018, I asked Mr. Market why he was punishing McKesson (the stock was trading for $124 at that point and would have resulted in a 330% return vs. 78% for the S&P 500). And the long term, McKesson clearly outperformed - indicating a wide economic moat.