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Are Investors Undervaluing McKesson (MCK) Right Now?
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While the proven Zacks Rank places an emphasis on earnings estimates and estimate revisions to find strong stocks, we also know that investors tend to develop their own individual strategies. With this in mind, we are always looking at value, growth, and momentum trends to discover great companies.
Looking at the history of these trends, perhaps none is more beloved than value investing. This strategy simply looks to identify companies that are being undervalued by the broader market. Value investors use a variety of methods, including tried-and-true valuation metrics, to find these stocks.
Zacks has developed the innovative Style Scores system to highlight stocks with specific traits. For example, value investors will be interested in stocks with great grades in the "Value" category. When paired with a high Zacks Rank, "A" grades in the Value category are among the strongest value stocks on the market today.
McKesson (MCK - Free Report) is a stock many investors are watching right now. MCK is currently sporting a Zacks Rank of #2 (Buy), as well as an A grade for Value. The stock is trading with a P/E ratio of 16.92, which compares to its industry's average of 18.98. Over the last 12 months, MCK's Forward P/E has been as high as 16.93 and as low as 12.75, with a median of 15.03.
MCK is also sporting a PEG ratio of 1.56. 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 industry has an average PEG of 1.80 right now. Over the last 12 months, MCK's PEG has been as high as 1.62 and as low as 1.23, with a median of 1.40.
Finally, we should also recognize that MCK has a P/CF ratio of 18.67. This data point considers a firm's operating cash flow and is frequently used to find companies that are undervalued when considering their solid cash outlook. This stock's P/CF looks attractive against its industry's average P/CF of 21.13. Over the past year, MCK's P/CF has been as high as 18.67 and as low as 11.52, with a median of 13.25.
These are only a few of the key metrics included in McKesson's strong Value grade, but they help show that the stock is likely undervalued right now. When factoring in the strength of its earnings outlook, MCK looks like an impressive value stock at the moment.
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Are Investors Undervaluing McKesson (MCK) Right Now?
While the proven Zacks Rank places an emphasis on earnings estimates and estimate revisions to find strong stocks, we also know that investors tend to develop their own individual strategies. With this in mind, we are always looking at value, growth, and momentum trends to discover great companies.
Looking at the history of these trends, perhaps none is more beloved than value investing. This strategy simply looks to identify companies that are being undervalued by the broader market. Value investors use a variety of methods, including tried-and-true valuation metrics, to find these stocks.
Zacks has developed the innovative Style Scores system to highlight stocks with specific traits. For example, value investors will be interested in stocks with great grades in the "Value" category. When paired with a high Zacks Rank, "A" grades in the Value category are among the strongest value stocks on the market today.
McKesson (MCK - Free Report) is a stock many investors are watching right now. MCK is currently sporting a Zacks Rank of #2 (Buy), as well as an A grade for Value. The stock is trading with a P/E ratio of 16.92, which compares to its industry's average of 18.98. Over the last 12 months, MCK's Forward P/E has been as high as 16.93 and as low as 12.75, with a median of 15.03.
MCK is also sporting a PEG ratio of 1.56. 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 industry has an average PEG of 1.80 right now. Over the last 12 months, MCK's PEG has been as high as 1.62 and as low as 1.23, with a median of 1.40.
Finally, we should also recognize that MCK has a P/CF ratio of 18.67. This data point considers a firm's operating cash flow and is frequently used to find companies that are undervalued when considering their solid cash outlook. This stock's P/CF looks attractive against its industry's average P/CF of 21.13. Over the past year, MCK's P/CF has been as high as 18.67 and as low as 11.52, with a median of 13.25.
These are only a few of the key metrics included in McKesson's strong Value grade, but they help show that the stock is likely undervalued right now. When factoring in the strength of its earnings outlook, MCK looks like an impressive value stock at the moment.