An active pharmacy benefits manager should smooth the path between patients and their prescription medications. There is an outfit in St Louis that handles the job well. It was the recipient of Fortune's first-ever "Streetie Award" for the best overall performance by any company.
Express Scripts (NASDAQ: ESRX) is one of the largest pharmacy benefit management companies in North America, serving over 50 million members through managed-care organizations, insurance carriers, employers and workers compensation groups. Services include network-pharmacy claims processing, formulary management, home delivery services, drug-utilization review, disease management and medical-data analysis services. The company also distributes a full range of injectable and infusion biopharmaceutical products directly to patients.
The stock has been a steady gainer recently, rising on such developments as solid Q3 earnings, upside guidance for
FY07/FY08 EPS and favorable analyst remarks. The news has kept ESRX shares cycling through a positive eight-week trading channel. The price is currently consolidating at the base of that channel, where oversold Momentum, MACD and Stochastic technical parameters suggest the potential for a rise back toward the top. The correspondence of the stock's 30-day moving average to the base of the channel backs the rebound notion.
Brokers recommend the issue with eight "strong buys", eight "buys" and five "holds". Analysts expect a 23% growth rate, through the next year. The ESRX Price to Sales ratio (0.96), EPS Growth rate (46.34%), Return on Assets (11.52%), Return on Investment (21.79%), Return on Equity (76.45%) and Revenue per Employee ($1.61M) compare favorably with industry, sector and S&P 500 averages. Institutions hold about 88% of the outstanding shares. The stock is one of those used to calculate the S&P 500 Index. Over the past 52 weeks, it has traded between $32.32 and $73.55. A stop-loss of $60.70 looks good here. Note that the firm is expected to report Q4 results in early February.
Larry Schutts is a contributing editor for Theflyonthewall.com and the Vice-President of Stockwinners.com.
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