McKesson distributes pharmaceuticals, medical-surgical supplies, and health and beauty care products throughout North America. The company also develops, implements, and supports software that facilitates the integration of data throughout the health enterprise. In addition, McKesson offers analytic, care management, and patient solutions for payers.
Yesterday, McKesson announced that Brian Tyler has been appointed executive vice president of corporate strategy and business development.
McKesson’s share price was heavily penalized and is now in an oversold situation close to a solid support area.

From a fundamental viewpoint, McKesson Corporation is undervalued in terms of enterprise value. Based on the current price, its market capitalization, minus its net debt, represents 0.17 times its revenues. The security is trading 12.44 and 11.32 times the next two years EPS. Furthermore, EPS estimates have been revised upward in the last few months by analysts. This positive fact opens the way for a better evaluation of the security by investors.

Technically, the security fell sharply for several sessions. This fall has lead McKesson toward the USD 86.3 support area which could become useful as a stepping stone for a technical rebound. The target of this bullish trend is the USD 96.7 resistance. Even though moving averages are still in a bearish trend, the oversold situation could encourage a renewed interest in McKesson.

So as to make the most of a potential technical rebound of McKesson, it seems opportune to take a long position at the current price. A confirmation of this pattern would enable the security to reach the USD 96.7 resistance, with a potential gain of 11.7 %. Investors should not insist under USD 82.2 and are better to place a stop loss order under this threshold.