| Stock (Symbol) | Stock Price | |
Express Scripts (ESRX) |
$51 |
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| Data is as of | Expected to Report | Sector |
May 23, 2012 |
July 20 |
Healthcare |
| Sharek’s Take | ||
 Express Scripts had issues two quarters ago. This quarter annual estimates increased, so I feel the stock is not only safer but can also continue marching forward.Express Scripts is merging with Medco (MHS) and this deal could close by the end of this quarter. This will more than double ESRX sales. The affect on profits is unknown, but there could be cost savings that aren’t seen yet. Estimates could increase — I don’t know if that’s the case — but either way this stock is undervalued. |
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| One-Year Chart | ||
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| Earnings Table | ||
 ESRX had sales of $12 billion last quarter, up from $11 billion a year ago. Next quarter sales are expected to be $26 billion, up from $11 billion in the same period a year ago. ESRX could start to reap benefits of synergy and that could lead profits to come in better than expected later this year.ESRX missed by 5 cents last quarter and estimates had been falling for three quarters. Annual Profit Estimates just increased, so I think the company has turned the corner and estimates will continue to go higher. Quarterly estimates show high-teens growth for the next two quarters then profit growth could come in greater than 25%. |
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| Fair Value | ||
 I think ESRX is worth 18 times earnings. Upside is solid for this year and next, and estimates could rise with synergies. |
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| Ten-Year Chart | ||
 I purchased ESRX for clients at $7 on 10/1/01. Its a good stock to own. Note ESRX hasn’t made headway since 2010, the stock could make a solid move higher in the next year — its due. |
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| Power Ranking | Bottom Line | |
Growth Portfolio
8 of 15 |
I’m excited about the merger going through. Sales are going to double, and the company should get some cost benefits that push profits up more than we think. ESRX ranks 8th in the 19 stock Growth Portfolio Power Rankings. This is not a candidate for the Aggressive Growth Portfolio. I have to see what the merger does for profits before I consider it for this portfolio. |
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Aggressive Growth Portfolio
N/A |
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ESRX was acting sick in late 2011. Now it seems like the stock was a bargain, but there was so much uncertainty as to how much ESRX would make if it discontinued the WAG relationship that you just didn’t know what to think.