This Day On The Street
Continue to site
ADVERTISEMENT
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

Tiger Consumer's Top 10 Grew 18% This Year

We like Express Scripts. In early April, the company acquired Medco Health Solutions for about $29.1 billion in cash and stock. Last year, Medco generated revenue of over $70 billion and earned about $1.5 billion. As a result, Express Scripts' revenue is expected to increase significantly in 2012. The acquisition is also expected to generate at least $1 billion operating synergies and more than $4 billion cash flow.

In addition to acquisition, Express Scripts has also been buying back its common shares. The company repurchased about 46.4 million of its shares over the past year, boosting its EPS. Analysts expect the company to make $3.60 per share in 2012 and $4.46 per share in 2013, vs. $2.98 per share for the trailing 12-month. The company's forward P/E ratio is about 16, on par with the industry average of 15.10. But, considering its strong growth potential (analysts expect the company's earnings to grow at an average of 16.4% in the next few years), we recommend investors buy this stock.

Starbucks (SBUX) and Herbalife (HLF) also had strong performance this year. Starbucks is up 28% and Herbalife has returned 36% so far this year. Starbucks is very popular among the hedge funds we track. There were 42 hedge funds with Starbucks positions at the end of the fourth quarter 2011, including billionaire Steven Cohen's SAC Capital, Ken Griffin's Citadel Investment Group, and Jim Simons' Renaissance Technologies. We agree with these hedge fund managers and we also recommend the stock as a buy (check out our previous article about Starbucks).

We like Herbalife too. We think the company will benefit from its expansion and the strong growth in Asia Pacific, South and Central America, and Mexico. We are bullish about the stock for the long term. Billionaire Jim Simons' Renaissance also had a large position in Herbalife. The only two other funds with large positions are East Side Capital and Ken Heebner's Capital Growth Management (see Ken Heebner's stock picks).
This commentary comes from an independent investor or market observer as part of TheStreet guest contributor program. The views expressed are those of the author and do not necessarily represent the views of TheStreet or its management.
2 of 2

Check Out Our Best Services for Investors

Action Alerts PLUS

Portfolio Manager Jim Cramer and Director of Research Jack Mohr reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

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
Stocks Under $10

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

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
14-Days Free
Only $9.95
14-Days Free
Dividend Stock Advisor

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
  • Updates with exact steps to take - BUY, HOLD, SELL
Trifecta Stocks

Every recommendation goes through 3 layers of intense scrutiny—quantitative, fundamental and technical analysis—to maximize profit potential and minimize risk.

Product Features:
  • Model Portfolio
  • Intra Day Trade alerts
  • Access to Quant Ratings
Options Profits

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

Product Features:
  • Actionable options commentary and news
  • Real-time trading community
SYM TRADE IT LAST %CHG
AAPL $112.34 4.29%
FB $89.89 3.05%
GOOG $614.34 2.77%
TSLA $247.69 3.80%
YHOO $31.77 0.54%

Markets

Chart of I:DJI
DOW 16,351.38 +293.03 1.82%
S&P 500 1,948.86 +35.01 1.83%
NASDAQ 4,749.9790 +113.8740 2.46%

Free Reports

Top Rated Stocks Top Rated Funds Top Rated ETFs