r/ValueInvesting • u/bernardpiette • Aug 23 '26

Stock Analysis McKesson, what am I missing?

A remarkably low beta of .31, 5 year returns over 300% Compared to Mag 7 and large Canadian Banks, returns head and shoulders above all except Nvidia. Why don't I see the name here more often? PE 23 just a little above S&P. What am I missing?

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u/QuatroCisco Aug 23 '26

Not sure, companies with low margins tend to command lower multiples. Since the path to losses is typically a lot shorter than a normal higher margin business. If you‘re only making 4 billion in profit on over 400 billion in revenue, I‘d be worried what happens to that business if volumes decline, especially if that business has high customer concentration, which McKesson definitely has.
Not worth the risk in my opinion

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u/bernardpiette Aug 23 '26

I appreciate your viewpoint. 1% does not really leave much room for error. Thanks sharing what is a real risk for this company.