Looking at Express Scripts

I wanted to do a quick post on Express Scripts ($ESRX). The reason I chose ESRX is that it neatly sums up almost everything I like about a stock. In fact, I’m not sure why I didn’t add it to this year’s Buy List.

If you’re not familiar with ESRX, the company is a pharmacy benefits management company, and it’s been astoundingly successful for the past several years. In 1992, the stock was going for less than 20 cents per share. Last October, it got as high as $66.

But if there’s any one factor you want to see, check out this chart of their earnings-per-share:

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This is exactly what you want to see — a nice rising trend. Their results were barely impacted by the recession. Note that the red bars are Wall Street’s estimates for this year and next. Normally, I’m not very trustful of analyst estimates beyond a few months. In this case, ESRX delivers earnings increases so regularly that I’m inclined to give them the benefit of the doubt. In fact, the estimates are on the conservative side.

Of course, the question is whether ESRX will stay as profitable in an Obamacare world. I honestly don’t know. I’m also wary of their purchase last year of Medco. But as far as its recent past, that’s exactly the kind of stock investors should seek — one with steadily rising profits.

Posted by on March 12th, 2013 at 1:34 pm


The information in this blog post represents my own opinions and does not contain a recommendation for any particular security or investment. I or my affiliates may hold positions or other interests in securities mentioned in the Blog, please see my Disclaimer page for my full disclaimer.

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