| Stock (Symbol) | Stock Price | |
Express Scripts (ESRX) |
$78 |
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| Data is as of | Expected to Report | Sector |
March 20, 2014 |
Apr 28 – May 2 |
Healthcare |
| Sharek’s Take | ||
 Express Scripts is having a slow-growth period right now, but management’s claims that the company should grow profits 18% to 21% in 2014 has sent the shares higher. ESRX’s merger with Medco should be completed by the second half of the year, and that is also when profit growth is expected to accelerate. Management buys back ESRX shares, and that adds to EPS growth. Although ESRX is timely now, the stock was cheaper last quarter when it had a P/E of 13. Now selling for 16 times earnings, the stock is close to its fair value and I don’t see much short-term upside. |
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| One-Year Chart | ||
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| Earnings Table | ||
 Revenue fell 6% last quarter because it lost the business of UnitedHealth group which is now doing the PBM business itself.ESRX met estimates last quarter and usually comes in around estimates, give or take a couple cents. Annual Profit Estimates stayed the same. Profit growth looks to pick up in the second half of the year. |
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| Fair Value | ||
 Look, I know its nice to put a 20 P/E on a company when profits are set to grow 20%, but ESRX hasn’t had a median P/E of 20 in this decade. This stock’s worth 17 times earnings and the P/E is 16 now, it would be wise to take profits. |
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| Ten-Year Chart | ||
 This has been one of the finest investments I’ve made in my career. Such a good company, but profit growth was much better earlier in the decade. Now ESRX grows primarily through pushing its clients from brand name drugs to more profitable generics. |
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| Power Ranking | Bottom Line | |
Growth Portfolio
23 of 25 |
Express Scripts should grow profits around 20% this year, but the good news is already baked into the share price. Still, this is a solid stock that should produce mid-teens growth well into the future. You can depend on this ESRX. ESRX ranks 23rd in the 25 stock Growth Portfolio Power Rankings. It is not in the Aggressive Growth Portfolio. |
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Aggressive Growth Portfolio
N/A |
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Wow, this stock has gone on a tear — even as profit growth has been in the single digits. I think the company can grow profits 15% a year and is worth 17 times earnings, its close to fair value now. ESRX is $78 and was a better deal last qtr when it was $63.