My journey of becoming financial independence by 35 years old
The stock is down by $40 today. The lowest in two years.
This is the 5 years MCK chart. Somebody has lost a lot of money in the last 2 years. Probably including myself, as MCK rank #3 on the S&P, and 70% of my 401K is residing in the S&P. Ouchy!!
Top Mutual Fund Holders. Yep! If you’re been a Vanguard Total Market Index fund, or mutual fund, your fund probably has gone down just a little bit.
Top Mutual Fund Holders
Holder Shares Date Reported % Out Value Vanguard Specialized-Health Care Fund 7,165,280 Jul 30, 2016 3.17% 1,394,076,862 Vanguard Total Stock Market Index Fund 4,493,325 Jun 29, 2016 1.99% 838,679,084 Growth Fund Of America Inc 3,701,000 Jun 29, 2016 1.64% 690,791,627 Vanguard 500 Index Fund 2,952,138 Jun 29, 2016 1.31% 551,016,539 Price (T.Rowe) Blue Chip Growth Fund Inc. 2,578,300 Jun 29, 2016 1.14% 481,239,679 Vanguard Institutional Index Fund-Institutional Index Fund 2,526,785 Mar 30, 2016 1.12% 397,336,941 SPDR S&P 500 ETF Trust 2,366,298 Jul 30, 2016 1.05% 460,386,934 Price (T.Rowe) Growth Stock Fund Inc. 2,230,147 Jun 29, 2016 0.99% 416,256,924 Vanguard Specialized-Dividend Growth Fund 2,027,690 Jul 30, 2016 0.90% 394,507,362 Price (T.Rowe) Health Sciences Fund 1,777,784 Jun 29, 2016 0.79% 331,823,372
What is McKesson:
McKesson Corporation operates as a pharmaceutical distribution services and information technology company in the United States and internationally. It offers pharmaceuticals and medical supplies, and services for healthcare operations. The company operates in two segments, McKesson Distribution Solutions and McKesson Technology Solutions. The McKesson Distribution Solutions segment distributes branded and generic pharmaceutical drugs and other healthcare-related products; and provides practice management, technology, clinical support, and business solutions to community-based oncology and other specialty practices. This segment also provides specialty pharmaceutical solutions for pharmaceutical manufacturers; and medical-surgical supply distribution, equipment, logistics, and other services to healthcare providers. In addition, this segment operates retail pharmacies in Europe and supports independent pharmacy networks in North America; sells financial, operational, and clinical solutions to pharmacies; and provides consulting, outsourcing, and other services. The McKesson Technology Solutions segment delivers enterprise-wide clinical, patient care, financial, supply chain, and strategic management technology solutions; and connectivity, outsourcing, and other services, including remote hosting and managed services to healthcare organizations. This segments product portfolio addresses various healthcare clinical and business performance needs ranging from medication safety and information access to revenue cycle management, resource utilization, and physician adoption of electronic health records. This segment serves integrated delivery networks, hospitals, physician practices, home healthcare providers, retail pharmacies, and payers. McKesson Corporation was founded in 1833 and is headquartered in San Francisco, California.
1. Missing earning by 11 cents. Analysts estimated $3.05, MCK reported $2.94/shares.It’s down because:
Analysts surveyed by FactSet were looking for adjusted earnings of $3.04 per share on revenue of $51.21 billion.
2. Cutting earning and revenues outlook. With both republican and democratic candidates said they’d address drug pricing rise uncontrollably. Pharmaceutical companies have been dropping like flies. You see GILD, AMGEN, ABBV all the darlings have been falling.
For fiscal 2017, McKesson now sees earnings per share between $12.35 and $12.85. Analysts are projecting earnings of $13.06 per share, according to FactSet.
Previously, the company guided full-year earnings per share between $13.43 and $13.93.
3. Analysts downgrade.
Additionally, the stock was downgraded by several firms today, including Leerink, Deutsche Bank and Baird.
1. It dropped 40 bucks in a day. Geezz. Hihi It’s now in $120s down by $80 from $202. I said, “enough!” And dived in.
2. Dividend payout is 10%. Well, it will have the cash flow to increase dividends with the 3 years average growth at 8%. In 6 years, I’d see my dividend double to $2/share? Hihi
3. Many pharmacies chain use MCK as drug wholesalers, and MCK as their OS system for drug Point of sale. MCK is diversified that way, it’s not just relying on selling drugs to make money. Other business includes selling healthcare equipment.
4. PE is 11 compares to CAH of 15. I know it doesn’t say much , as the company slash outlook, but PE near 10s are OK.
5. When oil price drops you don’t see stocks like CASEY gas or Phillip 66 stock correct that much. Because they are the middleman. If oil price is high, some of fee they’d always factored in to charge the customers are fixed. Then the mark up percentage. When the gas price go down, it effects the, but not by much. Then there is the people coming into the stores buying foods and merchandise. That will not change. So same with McKesson and Cardinal. Sure, their profit will be off a little bit. But we have not seen the price drop significantly just yet. It takes years for policy to take place.
6. The company authorize $4B stock buyback. So, we might see if the price dip below $100s, maybe I’ll buy somemore with the company? heheh
Here is the trading volume as of this morning:
|Avg Vol (3m)||1,570,738|
For that it’s okay in my book to invest 20 shares. If it dips further, I’ll buy more to reduce my cost.
I’m long MCK and S&P 500.