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Biotech / Medical : McKesson HBOC (MCK)
MCK 840.61-0.4%Jan 16 3:59 PM EST
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To: Christopher Reed who wrote (48)4/28/1999 10:38:00 AM
From: Rob Pierce  Read Replies (3) of 165
 
So how bad is this. Does it justify a 50% haircut/scalp?

Certainly, it's bad news, earnings were about 10c less than previously
reported (about a 12% reduction), and the annual growth rate dropped
from 21% to 18%.

A 10% reduction from the prior price level, even at 60, would mean the
stock would presumably slip to the 54 range all other things being
equal. Admittedly, the restatements are a downer, and the potential
for more is a legitimate fear, which all weigh on the price. But, do
you think that after this blows over that the stock would return to
the 50 range if the rest of the year's estimates follow through?
Earnings have been restated - but certainly not by 50%.

In other words, is this a buying opportunity? Or should we wait to
see if there will be more bombshells?

RP
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