Are Investors Undervaluing McKesson (MCK) Right Now?
The proven Zacks Rank system focuses on earnings estimates and estimate revisions to find winning stocks. Nevertheless, we know that our readers all have their own perspectives, so we are always looking at the latest trends in value, growth, and momentum to find strong picks.
Of these, perhaps no stock market trend is more popular than value investing, which is a strategy that has proven to be successful in all sorts of market environments. Value investors use fundamental analysis and traditional valuation metrics to find stocks that they believe are being undervalued by the market at large.
On top of the Zacks Rank, investors can also look at our innovative Style Scores system to find stocks with specific traits. For example, value investors will want to focus on the "Value" category. Stocks with high Zacks Ranks and "A" grades for Value will be some of the highest-quality value stocks on the market today.
One company value investors might notice is McKesson (MCK). MCK is currently holding a Zacks Rank of #1 (Strong Buy) and a Value grade of A. The stock holds a P/E ratio of 15.32, while its industry has an average P/E of 17.96. MCK's Forward P/E has been as high as 15.88 and as low as 12.75, with a median of 14.59, all within the past year.
MCK is also sporting a PEG ratio of 1.44. This figure is similar to the commonly-used P/E ratio, with the PEG ratio also factoring in a company's expected earnings growth rate. MCK's PEG compares to its industry's average PEG of 1.65. MCK's PEG has been as high as 1.56 and as low as 1.23, with a median of 1.39, all within the past year.
Finally, investors will want to recognize that MCK has a P/CF ratio of 13.84. This figure highlights a company's operating cash flow and can be used to find firms that are undervalued when considering their impressive cash outlook. MCK's P/CF compares to its industry's average P/CF of 18.52. Over the past 52 weeks, MCK's P/CF has been as high as 20.84 and as low as 11.52, with a median of 13.25.
These are just a handful of the figures considered in McKesson's great Value grade. Still, they help show that the stock is likely being undervalued at the moment. Add this to the strength of its earnings outlook, and we can clearly see that MCK is an impressive value stock right now.
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McKesson Corporation (MCK) : Free Stock Analysis Report
