5-Star Stocks Poised to Pop: McKesson

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Based on the aggregated intelligence of 180,000-plus investors participating in Motley Fool CAPS, the Fool's free investing community, pharmaceutical distributor McKesson (NYS: MCK) has earned a coveted five-star ranking.

With that in mind, let's take a closer look at McKesson's business and see what CAPS investors are saying about the stock right now.

McKesson facts

Headquarters (Founded)

San Francisco (1833)

Market Cap

$19.2 billion

Industry

Healthcare distributors

Trailing-12-Month Revenue

$117.3 billion

Management

Chairman/CEO John Hammergren
CFO Jeffrey Campbell

Return on Equity (Average, Past 3 Years)

15.9%

Cash/Debt

$3.9 billion / $4.0 billion

Dividend Yield

1%

Competitors

AmerisourceBergen (NYS: ABC)
Cardinal Health (NYS: CAH)
Owens & Minor (NYS: OMI)

Sources: S&P Capital IQ and Motley Fool CAPS.

On CAPS, 96% of the 606 members who have rated McKesson believe the stock will outperform the S&P 500 going forward. These bulls include Nalakensho and ladedodi.

Earlier this month, Nalakensho took the "buy what you know" approach and got bullish on the stock: "We order everything [from] McKesson. Can't run a health care office or hospital without it. They are not going anywhere."

McKesson even sports a cheapish price-to-cash flow of 6.7. That represents a discount to competitors like AmerisourceBergen (8.8), Cardinal Health (8.4), and Owens & Minor (29.2).

CAPS member ladedodi elaborates on the bull case:

The fundamental story is that McKesson is in the business of providing management products to the health care industry. Last year's health care reform law could bring many new patients into the system therefore increasing the demand for their products. That gives you a decent argument for good growth fundamentals. A value investor may also argue that the stock is already cheap.

What do you think about McKesson, or any other stock for that matter? If you want to retire rich, you need to put together the best portfolio you can. Owning exceptional stocks is a surefire way to secure your financial future, and on Motley Fool CAPS, thousands of investors are working every day to find them. CAPS is 100% free, so get started!

Want to see how well (or not so well) the stocks in this series are performing? Follow the newTrackPoisedToCAPS account.

At the time this article was published Fool contributorBrian Pacamparaowns no position in any of the companies mentioned.Motley Fool newsletter serviceshave recommended buying shares of McKesson. Try any of our Foolish newsletter servicesfree for 30 days.We Fools may not all hold the same opinions, but we all believe thatconsidering a diverse range of insightsmakes us better investors. The Fool'sdisclosure policyalways gets a perfect score.

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