The profit margin of McKesson, one of your recommended stocks, is 1%. Doesn’t that low margin make the earnings highly unpredictable and introduce risk? Thanks.
McKesson Corp., $86.99, symbol MCK on New York (Shares outstanding: 235.4 million; Market cap: $20.5 billion; www.mckesson.com), has long been a company with very high sales and yet low earnings. That’s mainly because its main business, drug distribution, is an inherently low-profit-margin activity.
McKesson is a recommendation of our Wall Street Stock Forecaster newsletter. The company is the largest wholesale drug distributor in the U.S. and Canada. It also owns 49% of Mexico’s largest drug distributor.
McKesson’s customers include 40,000 pharmacies, as well as doctor’s offices, hospitals and clinics. The company also supplies surgical tools and health and beauty products
To boost its profit margins, McKesson aims to keep expanding its technology solutions division, which makes computers and software that help pharmacies and clinics manage their drug inventories. This business supplies just 3% of McKesson’s revenue, but close to 25% of its earnings.
Meanwhile, McKesson’s profit margins, although low, are stable. The company is a leader in its field, and it continues to win…
Privacy Policy and Terms of Use
The Successful Investor Inc. and its affiliate Successful Investor Wealth Management (referred to hereafter as TSI Network) know that you care how information about you is used and shared, and we appreciate your trust that we will do so carefully and sensibly. This notice describes our privacy policy. By visiting websites owned by or associated with TSI Network, you are accepting the practices described in this Privacy Policy.
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The privacy of the site/store visitor is very important to TSI Network, and is respected at all times. The information we receive from customers helps us to personalize and continually improve your online experience at TSI Network.
We do not collect or disclose personal information, except when it is provided to us voluntarily by the site/store visitor with their consent.
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What personal information do we collect?
The information we receive from customers helps us personalize and continually improve your online experience at TSI Network. TSI Network may collect personal information online for all legal purposes, which include, but are not limited to:
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Does TSI Network Use the Information It Receives?
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COMMENTS: TERMS OF USE
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Changes to this Policy
This Policy is the sole authorized statement of TSI Network's practices with respect to the collection of personal information through TSI Network's websites and the subsequent use and disclosure of such information. Any summaries of this Policy generated by third party software or otherwise (for example, in connection with the "Platform for Privacy Preferences" or "P3P") shall have no legal effect, are in no way binding upon TSI Network, shall not be relied upon in substitute for this Policy, and neither supersede nor modify this Policy.
TSI Network may revise this Policy from time to time.
Legal Notices and Disclaimers
The contents of this web site and our publications are based upon sources of information believed to be reliable, but no warranty or representation, expressed or implied, is given as to their accuracy or completeness. Any opinion reflects the Successful Investor’s judgment at the date of publication and neither the Successful Investor, nor any of its affiliated companies, nor any of their officers, directors or employees, accepts any responsibility in respect of the information or recommendations contained in the publications or on this web site. Moreover, the information or recommendations are subject to change without notice.
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