| Stock (Symbol) | Stock Price | |
Catamaran (CTRX) |
$49 |
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| Data is as of | Expected to Report | Sector |
November 18, 2014 |
Feb 25 – Mar 2 |
Healthcare |
| Sharek’s Take | ||
 Catamaran hasn’t moved in a year, and might not move next year either. I’ve been on the fence about selling this stock for a while, and feel I just need to pull the trigger and do it. Catamaran is doing well, its Catamaran Difference program, where it devotes dollars to IT and customer service to get its client retention rate up from 95% to 98%, is doing a great job of retaining current customers. And the company said it has a lot of new deals which will be signed shortly — CTRX is clearly taking business from Express Scripts and CVS Caremark, the top 2 pharmacy benefit managers. Still, even with the good deal news, estimates didn’t increase (again), and CTRX is stuck growing in the teens (saddled with a 19 P/E). Furthermore the stock is $51 today, $1 away from my 2015 Fair Value of $53. I want to put my money to better use, and will sell CTRX from the Growth Portfolio. |
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| One-Year Chart | ||
 CTRX has had a higher tax rate this year (30% vs 26% in 2013) and that is hurting profits. But when I look to Estimates the slow growth is expected to continue — UGH!! In the last year the stock’s gone from $45 to $49? Not much. Still, with a P/E of 19 the stock’s selling around its Est LTG of 20%. |
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| Earnings Table | ||
 Revenue increased 53% last quarter due to acquisitions. Profits grew a mere 12% due partially to spending on Catamaran Difference. CTRX beat the street by 2 cents, and has beaten in each of the last 4 qtrs. Annual Profit Estimates are around what they were last qtr. If the company was signing deals, wouldn’t these numbers be increasing? What I really don’t like is quarterly estimates. Poor outlook for next year. I want 20%!!! |
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| Fair Value | ||
 This stock had a median price of $51 last year and today’s quote is $51. And next year’s Fair Value is $52. Still, this is a great buy-and-hold stock if you’re patient and don’t mind settling for teens growth. |
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| Ten-Year Chart | ||
 Great ten-year chart. I’ve owned these shares since 2004, bought in at $11 (thru acquisitions). That’s why I was hesitant to sell. But we need better profit growth. |
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| Power Ranking | Bottom Line | |
Growth Portfolio
N/A |
Catamaran is a great company if you are looking for mid-teens growth in a safe sector. The company will probably grow faster than expected as it acquires other PBMs and swallows them up. Still, the stock’s fairly valued here and I need more growth. CTRX will be sold from the Growth Portfolio and I will keep the stock on my radar, hopefully to buy back if it falls to $40. | |
Aggressive Growth Portfolio
N/A |
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