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Consider Express Scripts, because the spoils go to the pharmacy benefits managers

Posted Jun 9th 2009 6:10PM by Joseph Lazzaro (RSS feed)
Filed under: Stocks to Buy

An aging populace, plus likely, renewed emphasis on health and wellness in the United States bodes well for many health care players, and pharmacy benefits manager Express Scripts, Inc. (Nasdaq: ESRX) is one.

In general, analysts see F2009 revenue for ESRX falling about 1-2%, exclusive of results from WellPoint, Inc. (NYSE: WLP), which Express Scripts agreed to acquire earlier this year, pending approvals.

Continue reading Consider Express Scripts, because the spoils go to the pharmacy benefits managers

Medco Health: Still the right prescription for portfolios

Posted Jun 16th 2008 6:41PM by Joseph Lazzaro (RSS feed)
Filed under: Stocks to Buy

The market's choppy/consolidating tone, combined with the slow-growth/no-growth U.S. economy, suggests it is prudent to add a defensive stock or two to your portfolio, and with the aforementioned in mind, Medco Health Solutions is worth a review.

Medco Health Solutions (NYSE: MHS) is one of the largest U.S. pharmacy benefit managers, with services provided to client/member PBMs and physicians/pharmacies. (Note: Medco Health's shares split 2-for-1 on January 10, 2008.)

Analysts like Medco's high account retention, new business wins, economies of scale, and the company's entry into the Medicare Part B segment with its acquisition of PolyMedica.

Continue reading Medco Health: Still the right prescription for portfolios

Medco Health: The right prescription for a choppy market

Posted Dec 13th 2007 12:55PM by Joseph Lazzaro (RSS feed)
Filed under: Stocks to Buy

Medco Health Solutions (NYSE: MHS) logo Most portfolios could benefit from a pharmacy supply play for defensive purposes, and Medco Health Solutions (NYSE: MHS) is worthy of consideration for this role. Medco Health is one of the largest pharmacy benefits managers in United States, with services provided to member health plans offered by unions, HMOs, and corporations, among other organizations.

Analysts like Medco's high account retention, new business wins, economies of scale, and the company's entry into the Medicare Part B segment with its acquisition of PolyMedica. The Reuters F2007/F2008 EPS consensus estimates for MHS are $3.60/$4.38.

The risks? Analysts have their eye on the increased market penetration of generic drugs and some pricing pressure in contract renewals. Also, the stock's PE ratio of 30 is high, even considering MHS's growth prospects, hence the stock is vulnerable to a pull-back. The problem with the 'buy on pull-back' tactic here is that MHS's pull-backs have been mild, so there's no guarantee of a 5% pull-back before a share purchase decision.

Continue reading Medco Health: The right prescription for a choppy market

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Last updated: November 11, 2009: 05:16 PM

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