Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Biotech / Medical : McKesson HBOC (MCK) -- Ignore unavailable to you. Want to Upgrade?

To: EL KABONG!!! who wrote (57)	4/29/1999 8:34:00 AM
From: Tony van Werkhooven	Read Replies (3) \| Respond to of 165

MCK- looks like at least 7 class action suits are in the process of being filed- lawyers- what a sleazy "profession" Sure wish something is done to control what is largely frivolous and economically non-productive activity. Tony

To: EL KABONG!!! who wrote (57)	4/29/1999 1:37:00 PM
From: Tom_	Read Replies (3) \| Respond to of 165

I've nibbled, and here's why: I've taken a portion of a long term position, in part because of the following. On April 22, MCK reported FY revenues as follows (in millions): Health Care Supply Management............. 21,664 up 21% Water Products…………………………… 353 up 13% Corporate………………………...........……33 Health Care Information Technology…..… 1,784 up 21% ......Software.......546 up 22% (less 42MM revision=504MM) ......Services....1,016 up 25% ......Hardware....221 up 1% Total…………….................……………23,814 (less 42MM=23,772MM) (Figures above are taken from MCK 4Q and Restatement releases; computations below are mine) Thus it seems to me that the problems were in a sector (Software sales) of the company that accounts for about two per cent of its revenue. (504MM divided by 23,772MM). Also, the problem as currently disclosed amounts to 42MM, or less than two-tenths of a per cent of that total revenue. As revised, HCIT sector still shows a year-over-year profit of 18% (versus reported 21%). However, the company now expects its next FY software revenue to be less than the current year. Note, moreover, that since HCIT is much more profitable than HCSM, the 42MM amounts to 8% of the unrevised pre-tax profits of the HCIT sector and 4% of the total MCK unrevised pre-tax profits. MCK is now trading at about 14 times revised forward earnings and 17 times revised trailing earnings. The company is now forecasting 25% growth for the next fiscal year. They've caught it. It's in the past. (Except for the part to be disclosed in the near-term future <g>). Problem addressed. So, here's hoping my computations are correct. (Too late now, Tom!)<G> Best wishes, Tom