| Stock (Symbol) | Stock Price | |
Catalyst Health Solutions (CHSI) |
$58 |
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| Data is as of | Expected to Report | Sector |
September 21, 2011 |
Oct 31 |
Healthcare |
| Sharek’s Take | ||
 The stock market has put some separation between Catalyst Health Solutions (CHSI) and Express Scripts (ESRX), giving CHSI a P/E double ESRX’s. I’ve owned both stocks for many years, and think CHSI is selling right where it should be, and ESRX is incredibly undervalued. Express Scripts is attempting to purchase Medco, which would make ESRX a much bigger company in a good and bad way. First there would be a lot of cost cutting that would lead to greater profits. Second the company would be so large it would be hard to grow at 20% anymore. CHSI is a smaller company that has the flexibility to grow 25% a year.CHSI isn;’t undervalued, yet at the same time there’s a huge number of stocks on sale. European news is knocking down the U.S. stock market. Its been that way since the beginning of August. Once they get past the process of “fixing Europe” the U.S. market should come storming back — but not CHSI because the stock hasn’t taken a hit. Other stocks have better value right now. |
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| One-Year Chart | ||
 CHSI has had a marvelous year, going from $35 to $55 the past twelve months. The stock’s P/E is 25, and when you look at the quarterly profits along the bottom, that seems about right. Not much to say here, everything looks how it should. |
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| Earnings Table | ||
 Acquisitions helped revenue rise 39% last quarter. Profits grew 20%.CHSI beat by a penny, and those estimates were lowered the prior two quarters. CHSI always has ared in its earnings table. You just have to accept it. Annual Profit Estimates look about the same as last quarter. Increased profitability from the Walgreen’s PBM business should start hitting in 2013.Quarterly estimates show growth is set to accelerate three quarters from now. |
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| Fair Value | ||
 I’ve thought CHSI was deserving of a 25 P/E for a while now. That’s exactly where it is right now. Upside for 2012 is 27%, about where it should be. |
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| Ten-Year Chart | ||
 Catalyst used to be named HealthExtras (HLEX). I originally purchased HLEX for the Growth Portfolio at $14 on 5/4/2004.CHSI looks to be a little high on the chart right now. The stock won’t likely keep running higher. Seems like a base is needed here. |
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| Power Ranking | Bottom Line | |
Growth Portfolio
11 of 21 |
Catalyst Health Solutions has separated from Express Scripts this year. The stock is where it should be and ESRX is extremely undervalued. Investors will get more bang-for-their buck in the short term with ESRX. CHSI is a better long-term investment because the company is growing faster than ESRX. CHSI is ranked 11th in the 21 stock Growth Portfolio Power Rankings. CHSI isn’t in the Aggressive Growth Portfolio. |
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Aggressive Growth Portfolio
N/A |
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