Sometimes our biggest medical emergency is the cost of the drugs we need to treat our physical ailments. There is a firm in Franklin Lakes, New Jersey, that actively pursues initiatives to cut increasing drug costs and it has some clout. It is the nation's leading pharmacy benefit manager and operates the country's largest mail order pharmacy.

Medco Health Solutions (NYSE: MHS) serves some 65 million members in the U.S. and Puerto Rico. Patients fill their prescription needs through a network of close to 60,000 pharmacies, a mail-order program, or the company's online pharmacy. Medco helps contain pharmacy health care costs for private and public employers, health plans, labor unions, government agencies, and individuals served by the Medicare Part D Prescription Drug Program. Cigna (NYSE: CI) and Express Scripts (NASDAQ: ESRX) are major competitors. IBM (NYSE: IBM) is a major customer.

The stock is up 30 percent over the past five months, sparked by such issues as an important acquisition (PolyMedica), a solid Q3 earnings report, the announcement of a two-for-one stock split (1/24) and the recent affirmation of FY07/FY08 EPS guidance. The news has the stock cycling through a positive trading channel. The price has moved to the base of that channel, where oversold CCI, MACD, Momentum and Stochastic technical parameters suggest the potential for a rise back toward the top. Correspondence of the stock's 50-day moving average to the base of the channel backs the rebound notion.

Brokers recommend the issue with seven "strong buys," nine "buys" and five "holds." Recent price targets are in the range $109-$122. Analysts see a 22 percent growth rate through the next year. The stock's Price to Sales ratio (0.62), Price to Book ratio (4.12), Price to Free Cash Flow ratio (17.71), EPS Growth rate (25.97%) and Revenue per Employee ($2.90M) compare favorably with industry, sector and S&P 500 averages. Institutional investors hold about 76 percent 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 $55.79 and $109.25. A stop-loss of $88.00 looks good here. Note that the firm is expected to announce Q4 results in late February.

Larry Schutts is a contributing editor for Theflyonthewall.com and the Vice-President of Stockwinners.com. He does not hold positions in any of the stocks mentioned above.