| Stock (Symbol) | Stock Price | |
Express Scripts (ESRX) |
$79 |
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| Data is as of | Expected to Report | Sector |
November 18, 2014 |
Feb 18 – Feb 23 |
Healthcare |
| Sharek’s Take | ||
 Express Scripts should continue to do in 2015 what it has been doing — and that’s rising at a high-teens rate. Express Scripts is a pharmacy benefit manager, that just acquired Medco. The combined corporation is a powerhouse now, and isn’t growing profits in the 20% range as it used to. Still, with ESRX you get dependable growth — it’s Old Dependable in my portfolio, pushing out profit growth every year. I originally purchased the stock in 2001 for $7 and its been a ten-bagger due to buy-and-hold. ESRX grows profits by buying back stock and switching customers from low-margin brand name drugs to high margin generic drugs. Profits rise when sales are flat with generics. ESRX has upside to my 2015 Fair Value of 17%. It’s a good safe stock for conservative investors looking for growth. |
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| One-Year Chart | ||
 The stock’s had a pretty good year. But the recent $70 to $80 move makes ESRX look good. The Estimated Long Term Growth Rate of 14% isn’t good enough, and that’s why ESRX isn’t a top holding of mine. But you’re only paying 15x earnings for it. Estimates show faster growth coming, due to easy year-ago comparisons. |
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| Earnings Table | ||
 Last qtr Express Scripts had profit growth of 21% on -1% sales growth.The company met earnings estimates, and is usually around the number. Annual Profit Estimates stayed the same. Quarterly profit growth is expected to be 15% on average the next four quarters. Not much in the Earnings Table. |
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| Fair Value | ||
 My calculations suggest a 17% move up for ESRX between now and the end of 2015. That’s fair. I wish it was 20% but we have to settle. ESRX does have high certainty & consistency. It adds safety to our portfolios. |
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| Ten-Year Chart | ||
 This stock always has one of the prettiest ten-year charts around. The only thing I don’t like is annual profit growth has slipped from the 20% range to the teens. |
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| Power Ranking | Bottom Line | |
Growth Portfolio
17 of 22 |
Express Scripts is Old Dependable in my client’s portfolios. The stock just keeps churning upwards. The negative is this is only a mid-teens grower, so we have to sacrifice growth opportunity for consistency & certainty. ESRX ranks 17th of 22 stocks in the Growth Portfolio Power Rankings. It doesn’t have enough of a spark for the Aggressive Growth Portfolio. |
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Aggressive Growth Portfolio
N/A |
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