Furthermore, when I take next year's EPS estimate of $2.34 per share and extrapolate them over the next five years at 30% per year, I come up with a fairly large number.
When I apply what I consider to be an appropriate multiple to those future EPS forecasts, I get a five-year target price of just over $105 per share. This is still more than double where the shares are today.
In other words, I can still justify this stock from a valuation point of view.
Performance and valuation are two pieces of a three-part puzzle for me. The third piece is the stock chart. I like a good, healthy stock chart.
I see very little to not like in the current three-year stock chart of Catamaran.
Overall, when I compare the stock against the other 3,278 stocks that I follow, it gets an overall grade of "A-."
I only like to buy "A-" stocks or better. Catamaran is one of the better large-cap stocks in the market right now. Bu, as always, stay vigilant.
Clients of Gunderson Capital Management are long the stock.
Data from Best Stocks Now App
This article was written by an independent contributor, separate from TheStreet's regular news coverage.