| Stock (Symbol) | Stock Price | |
Catamaran (CTRX) |
$49 |
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| Data is as of | Expected to Report | Sector |
November 12, 2012 |
N/A |
Healthcare |
| Sharek’s Take | ||
 Catamaran (CTRX) has had a great year and the stock’s taking a well-deserved rest. Catalyst Health Solutions (CHSI) and SXC Health Solutions (SXCI) merged to create Catamaran and Wall Street applauded the deal by sending both SXCI and CHSI higher. Now CTRX is building a base and getting employees adjusted to the new company.Last quarter was ho-hum for CTRX but profit growth looks to accelerate next quarter. I feel CTRX will continue to base, then breakout and run up around 30%. |
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| One-Year Chart | ||
 Here’s the one-year chart of CTRX (some of this chart is SXCI), note the base the stock’s been building since April. CTRX had a P/E of 44 in last quarter’s research report, and now the P/E is a reasonable 27. Profits are expected to grow from $1.10 this year to $1.80 next year, a robust 63% increase. |
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| Earnings Table | ||
 Last quarter was the first quarter of the merged company. Sales jumped 14% LastQtr, up from 40% 2QtrsAgo. Profits increased only 14% last quarter, but I feel that was a one-time deal.CTRX beat by a penny last quarter but these estimates declined 3 cents earlier. CHSI used to beat and miss by a little all the time and I ended up ignoring this stat after a while. 2012 estimates held steady and there’s a good chance these numbers end up being beat because of synergies created from the merger and the fact a bigger PBM can land bigger deals (CTRX just inked a 3 year deal to be Target’s pharmacy benefit manager). This company could have exceptional profit growth in 2013. Quarterly estimates look awesome. |
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| Fair Value | ||
 This stock is currently selling for 45x 2012 est. If the P/E goes down to 35 and CTRX earns the $1.80 expected this stock will rise around 30%. |
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| Ten-Year Chart | ||
 This chart history is the newly formed CTRX and the late SXCI. This chart makes this stock look like a great one. SXCI wasn’t a great grower until 2009. I think CTRX needed to take a break and base otherwise the stock would be prone to have a deep correction. |
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| Power Ranking | Bottom Line | |
Growth Portfolio
10 of 17 |
Catamaran is taking a breather after a nice run higher. I feel the stock is set to make another move up by mid-2013 because profits are scheduled to grow 63% next year. I love this stock for long-term investors. One could buy-and-hold it like we did with CHSI. CTRX is ranked 10th in the 17 stock Growth Portfolio Power Rankings. This stock isn’t moving right now so it isn’t part of the Aggressive Growth Portfolio. |
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Aggressive Growth Portfolio
N/A |
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