Purchase adds to uncertain outlook

Article Excerpt

MCKESSON CORP. $111 (New York symbol MCK; Aggressive Growth Portfolio, Consumer sector; Shares outstanding: 195.4 million; Market cap: $21.7 billion; Price-to-sales ratio: 0.1; Dividend yield 1.3%; TSINetwork Rating: Above Average; www.mckesson.com) is the largest wholesale drug distributor in the U.S. and Canada. It also operates drugstores in Europe. The company has completed its acquisition of Medical Specialties Distributors. That privately held firm distributes blood infusion and medical-surgical supplies. McKesson paid $784 million for that business. With the addition of Medical Specialties Distributors, the company expects to earn between $13.20 and $13.80 a share for fiscal 2019. The stock trades at 8.2 times the midpoint of that range. However, that low p/e reflects several challenges for McKesson, including the possibility of new competition from Amazon.com and legal action over any alleged role the company played in the illicit distribution of opioid painkillers. McKesson is still a hold. hold…

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