Express Scripts (ESRX) shares advancing through a positive trading channel

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.