Express Scripts (ESRX) Flagged As A Storm The Castle Stock - TheStreet

Trade-Ideas LLC identified

Express Scripts

(

ESRX

) as a "storm the castle" (crossing above the 200-day simple moving average on higher than normal relative volume) candidate. In addition to specific proprietary factors, Trade-Ideas identified Express Scripts as such a stock due to the following factors:

  • ESRX has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $405.4 million.
  • ESRX has traded 2.3 million shares today.
  • ESRX is trading at 1.61 times the normal volume for the stock at this time of day.
  • ESRX crossed above its 200-day simple moving average.

'Storm the Castle' stocks are worth watching because trading stocks that begin to experience a breakout can lead to potentially massive profits. Once psychological and technical resistance barriers like the 200-day moving average are breached on higher than normal relative volume, the stock is then free to find new buyers and momentum traders who can ultimately push the stock significantly higher. Regardless of the impetus behind the price and volume action, when a stock moves with strength and volume it can indicate the start of a new trend on which early investors can capitalize on. In the event of a well-timed trading opportunity, combining technical indicators with fundamental trends and a disciplined trading methodology should help you take the first steps towards investment success.

EXCLUSIVE OFFER: Get the inside scoop on opportunities in ESRX with the Ticky from Trade-Ideas. See the FREE profile for ESRX NOW at Trade-Ideas

More details on ESRX:

Express Scripts Holding Company operates as a pharmacy benefit management (PBM) company in the United States and Canada. The company operates through two segments, PBM and Other Business Operations. ESRX has a PE ratio of 28. Currently there are 12 analysts that rate Express Scripts a buy, no analysts rate it a sell, and 9 rate it a hold.

The average volume for Express Scripts has been 4.5 million shares per day over the past 30 days. Express Scripts has a market cap of $57.7 billion and is part of the health care sector and health services industry. The stock has a beta of 0.75 and a short float of 6.4% with 9.81 days to cover. Shares are down 0.7% year-to-date as of the close of trading on Tuesday.

EXCLUSIVE OFFER: See inside Jim Cramer's multi-million dollar charitable trust portfolio to see the stocks he thinks could be potential winners. Click here to see his holdings for 14-days FREE.

TheStreetRatings.com

Analysis:

TheStreet Quant Ratings

rates Express Scripts as a

buy

. The company's strengths can be seen in multiple areas, such as its impressive record of earnings per share growth, compelling growth in net income, revenue growth, notable return on equity and good cash flow from operations. We feel its strengths outweigh the fact that the company has had generally high debt management risk by most measures that we evaluated.

Highlights from the ratings report include:

  • EXPRESS SCRIPTS HOLDING CO has improved earnings per share by 31.3% in the most recent quarter compared to the same quarter a year ago. The company has demonstrated a pattern of positive earnings per share growth over the past two years. We feel that this trend should continue. During the past fiscal year, EXPRESS SCRIPTS HOLDING CO increased its bottom line by earning $2.66 versus $2.31 in the prior year. This year, the market expects an improvement in earnings ($5.50 versus $2.66).
  • The company, on the basis of net income growth from the same quarter one year ago, has significantly outperformed against the S&P 500 and exceeded that of the Health Care Providers & Services industry average. The net income increased by 16.5% when compared to the same quarter one year prior, going from $515.20 million to $600.10 million.
  • Despite its growing revenue, the company underperformed as compared with the industry average of 10.2%. Since the same quarter one year prior, revenues slightly increased by 1.4%. Growth in the company's revenue appears to have helped boost the earnings per share.
  • Current return on equity exceeded its ROE from the same quarter one year prior. This is a clear sign of strength within the company. Compared to other companies in the Health Care Providers & Services industry and the overall market, EXPRESS SCRIPTS HOLDING CO's return on equity exceeds that of both the industry average and the S&P 500.
  • Net operating cash flow has increased to $899.90 million or 22.35% when compared to the same quarter last year. The firm also exceeded the industry average cash flow growth rate of -5.17%.

EXCLUSIVE OFFER: See inside Jim Cramer's multi-million dollar charitable trust portfolio to see the stocks he thinks could be potential winners. Click here to see his holdings for 14-days FREE.