In our last Number Cruncher we discussed how McKesson Corporation (MCK:NYSE), HCA Healthcare Inc (HCA:NYSE), & BIOGEN Inc. (BIIB:NASDAQ) are Health Care companies with favorable metrics.
Let’s Begin with McKesson Corporation:
MCK has an SP Score of 81, up by 10 points in the past 90 days. This is derived by using the Performance score of 84.4 and the Risk score of 19.6. The company had a significant earnings growth of 244.9% and has been able to maintain its 5Y earnings growth average at a whopping 1505.4%. The company saw a sale growth of 4.8% this year. It has a good volatility and quality score.
The company’s NOPAT shows a healthy uptrend. The company’s FGV has increased compared to last quarter and approximately matches the current value of operation. The current market pricing indicates that the company is not expected to experience any growth in the foreseeable future, which might make it an appealing proposition in terms of pricing.
HCA Healthcare Inc:
HCA has an SP score of 83 (Performance score: 84.2 & Risk score: 64.7) in the past 90 days. The company has scored a Value score of 65, a quality score of 78 and a growth score of 60. The company has been able to maintain an average 5Y earnings per share growth of 22.2%. Last year, the company saw an increase of about 1.9% in revenues.
HCA healthcare had an impressive return on capital this year of about 19.7% and was able to maintain its 5Y average of about 16.5%. The company’s share price determine the market value added and it seems that for the last 5 quarters since Q2 of 2022, the company has been able to add market value while the invested capital remains the same suggesting the company is more expensive than it was in Q2 2022.
Although the company improved its NOPAT in the last quarter its NOPAT has been in decline for the entire of last year. Considering the NOPAT decline and MVA showcasing a little overvaluation, we recommended to be cautious before investing in the stock to make sure the NOPAT will continue in the right direction. If not, the company could see a price correction.
Biogen Inc:
Biogen Inc’s SP score decreased by 1 point, decreasing to 67 within the last quarter. The company’s sales declined by 6.9%, however, showed a significant EPS growth of about 120.7% last year. The company has been able to maintain its 5Y average growth rate of about 17.6%.
The company has been able to increase its NOPAT consistently for the past four quarters. The company’s Future growth value was positive last year with its current operating value reaching pre-Covid 19 levels. According to the FGV histogram graph, the company’s current operating value has caught up to our previous estimate, remaining stable for last two quarters, concurrently, the EVA and NOPAT showed an uptrend for last three quarters.
If the current uptrend in the NOPAT continues and the company showcases improvement in revenue, we estimate approximately 51.6% upside, making it potentially a buy.
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