McKesson Corporation (MCK) Stock: Should Investors Follow These Insider Trades?

McKesson Corporation (NYSE:MCK) saw an upside of 0.32% to close Friday at $200.02 after adding $0.64 on the day. The 5-day average trading volume is 686,560 shares of the company’s common stock. It has gained $208.48 in the past week and touched a new high 4 times within the past 5 days. An average of 809,660 shares of the company has been traded in the last 20 days, and the 50-day average volume stands at 881,430.

MCK’s 1-month performance is -1.46% or -$2.97 on its low of $195.31 reached on 10/01/21. The company’s shares have touched a 52-week low of $141.32 and high of $210.00, with the stock’s rally to the 52-week high happening on 08/05/21. YTD, MCK has achieved 15.01% or $26.10 and has reached a new high 25 times. However, the current price is down -4.75%% from the 52-week high price.

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Insider Transactions

On Sep 13, 19 days have gone by since the last insider trading activity for McKesson Corporation (MCK). Vitalone Britt J. (EVP & CFO) most recently sold 22,085 shares at $203.75 per share on Sep 13. This transaction cost the insider $4,499,817. EVP, Chief Legal Officer & GC, Schechter Lori A., sold 14,419 shares at a price of $203.03 on Aug 03. Then, on Aug 02, Chief Executive Officer TYLER BRIAN S. sold 1,467 shares at a price of $203.84 per share. This transaction amounted to $299,033.

Valuation Metrics

McKesson Corporation (MCK) has a trailing price-to-earnings (P/E) ratio of 17.62 for the broader industry and 32.48 for the sector, meaning that investors are optimistic about the stock’s future prospects. The company’s PE ratio for the last five years has touched a high of 2248.83 and a low of 5.786. MCK stock has a beta of 0.86. Moving on to other valuation ratios, the trailing price-to-sales (P/S) ratio is 0.13 while the price to cash flow ratio at 9.53.

McKesson Corporation pays an annual dividend of $1.88 per share. Its dividend yield is 0.94%. MCK’s most recent quarterly dividend payment was made on Oct. 1, when it paid $0.47 a share compared with prior rate of $0.42, up 10.64% from last year’s. The company has boosted its dividend for the last 22 consecutive years with the latest dividend increase of $0.05 reported on Monday July 26 2021. Measured over the last 3 years, the Dividend has been growing by 33.87% yearly.

It is projected that McKesson Corporation’s next ex-dividend date will be on 1-Dec. MCK is expected to distribute $0.47 as its next dividend.

McKesson Corporation’s quick ratio for the period ended June 29 was 0.50, with the current ratio over the same period at 1.00 meaning that MCK stock is able to fulfill its debt obligations. In terms of profitability, the gross margin trailing 12 months is 5.20%The trailing 12-month EBITDA margin is 1.99% while for the period ending June 29; McKesson Corporation’s operating margin was -2.10%. The firm’s gross profit as reported stood at $12.15 billion against revenue of $238.23 billion.

The effectiveness of a company’s management is also important for investors when it comes to determining the potential profitability of the investment. McKesson Corporation’s return on assets over the past 12 months stands at -7.20%. Return on investment over the past year is -61.00%, while its return on equity (ROE) trailing 12 months is -369.90%. In comparison, the average ROE for the broader industry over the past year is 9.46.

Earnings Surprise

For the quarterly period ending June 29 this year, Net income and sales went up compared to those figures reported in the previous quarter. Net income grew 11.16% to $62.67 billion, while revenue of $59.14 billion was 5.64% off the previous quarter. Analysts expected MCK to announce $4.15 per share in earnings in its latest quarter, but it posted $5.56, representing a 34.00% surprise. EBITDA for the quarter stood at more than $786.0 million. MCK stock balance sheet for the quarter ending June 29 shows that total liabilities totaled 62.94 billion, with total debt at $9.64 billion. Shareholders hold equity totaling $154.68 million

Technical Picture

Let’s look briefly at McKesson Corporation (MCK) price momentum from a technical analysis perspective. The 9-day relative strength index as at close on 01 October was 41.07% to suggest the stock is trending Neutral, with historical volatility in this time period at 19.08%.

The stock’s 5-day moving average is $202.38, reflecting a -1.54% or -$3.13 change from its current price. MCK is currently trading -3.28% above its 20-day SMA, +1.05% above its 100-day SMA. However, the stock’s current price level is away from the SMA50 and SMA200 by +0.50% and +15.57% respectively.

Stochastic %K and %D was 30.09% and 34.35% and the average true range (ATR) pointed at 4.32. The RSI (14) points at 44.62%, while the 14-day stochastic is at 32.75% with the period’s ATR at 4.12. The stock’s 9-day MACD Oscillator is pointing at -0.77 and -2.06 on the 14-day charts.

Analyst Ratings

In the most recent analyst report for McKesson Corporation (NYSE: MCK), Argus upgraded it to a Buy rating. They previously had a Hold rating on the stock. Analysts offering their rating for MCK stock have a consensus rating for the stock as Overweight. Currently, 0 brokerage advisors rate MCK as a “sell,”, while 3 advise that investors “Hold.” 0 analysts have rated the stock as underweight. 3 rates the stock as overweight while 10 have offered a “buy” rating.

What is MCK’s price target for the next 12 months?

Analysts have a consensus price target ranging from a low of $210.00 and a high of $270.00, with their median price target at $237.00. Looking at these predictions, the average price target given by analysts is for McKesson Corporation (MCK) stock is $240.38.


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