This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here
TheStreet Open House

5 Stocks Set to Soar off Bullish Earnings

Express Scripts

Content on this page requires a newer version of Adobe Flash Player.

Get Adobe Flash player

One earnings short-squeeze candidate in the healthcare facilities sector is Express Scripts (ESRX), which is set to release numbers on Wednesday after the market close. Wall Street analysts, on average, expect Express Scripts to report revenues of $11.60 billion on earnings of 85 cents per share.

This company has seen its net income trend higher for three straight quarters. During the most recent quarter, net income trended higher by 7.7% from the year-ago same quarter. Express Scripts has seen its revenue trend higher for two straight quarters. The stock is trading about eight points off its 52-week high of $60.89 as we approach their earnings report this week.

The current short interest as a percentage of the float for Express Scripts is very high at 20.2%. That means that out of the 482.82 million shares in the tradable float, 90.58 million are sold short by the bears. The bears have also been increasing their bets from the last reporting period by 5.2%, or by about 4.47 million shares. If the bears are caught leaning too hard into the quarter, then this stock could skyrocket since the short interest is so high.

From a technical perspective, ESRX is currently trading above its 50-day and 200-day moving averages, which is bullish. This stock has been uptrending strong since it printed a recent low last October at $34.47 a share. During that uptrend, shares of ESRX have been making mostly higher lows and higher highs, which is bullish price action. Now the stock sets up to break out post-earnings if the bulls get what they want.

If you're bullish on ESRX, I would wait until after it report earningss and look for long-biased trades if the stock breaks out above some near-term overhead resistance at $53 a share with heavy volume. Look for volume that's tracking in close to or above its three-month average volume of 6.7 million shares. If we get that action, then look for ESRX to make a run at $57.47 to $60.89 a share.

I would avoid ESRX or look for short biased trades if the stock fails to break out over $53, and then drops below $51 a share with volume. Target a drop back toward its 200-day moving average of $48.70 a share, or possibly much lower if the bears beat this stock down post-earnings on heavy volume.

Express Scripts, one of 8 UBS Stock Picks for 2012, shows up on a recent list of Health Care Stocks Bought and Sold by Hedge Funds. In the fourth quarter, George Soros increased his position in the stock by 240%.

4 of 6

Select the service that is right for you!

Action Alerts PLUS
Try it NOW

Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
  • Weekly roundups
TheStreet Quant Ratings
Try it NOW
Only $49.95/yr

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
  • Upgrade/downgrade alerts
Stocks Under $10
Try it NOW

David Peltier, uncovers low dollar stocks with extraordinary upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
  • Weekly roundups
Dividend Stock Advisor
Try it NOW

Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Alerts when market news affect the portfolio
  • Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
Real Money Pro
Try it NOW

All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.

Product Features:
  • Real Money + Doug Kass Plus 15 more Wall Street Pros
  • Intraday commentary & news
  • Ultra-actionable trading ideas
Options Profits
Try it NOW

Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • 100+ monthly options trading ideas
  • Actionable options commentary & news
  • Real-time trading community
  • Options TV
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!
DOW 17,156.85 +24.88 0.15%
S&P 500 2,001.57 +2.59 0.13%
NASDAQ 4,562.1890 +9.43 0.21%

Brokerage Partners

Rates from

  • Mortgage
  • Credit Cards
  • Auto

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs