Editor's Note: Any reference to TheStreet Ratings and its underlying recommendation does not reflect the opinion of TheStreet, Inc. or any of its contributors including Jim Cramer or Stephanie Link.
Trade-Ideas LLC identified
) as a momo momentum 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 $246.3 million.
- ESRX has a PE ratio of 39.5.
- ESRX is currently in the upper 30% of its 1-year range.
- ESRX is in the upper 25% of its 20-day range.
- ESRX is in the upper 35% of its 5-day range.
- ESRX is currently trading above yesterday's high.
- ESRX has experienced a gap between today's open and yesterday's close of 0.4%.
'Momo Momentum' stocks are valuable stocks to watch for a variety of reasons including historical back testing and price action. Market technicians refer to such stocks as being in a mark-up phase before a possible distribution period and price decline. Technical analysts and traders frequently find that the factors referenced above tend to create a temporary burst of strong wind in a stock's sail. Nevertheless, all successful traders must excel at maximizing gains while keeping losses to an absolute minimum. For that reason, the holding period on momo momentum stocks must always be a primary consideration, and this part of the puzzle is ultimately at the discretion of each individual's risk tolerance and portfolio risk management skills.
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More details on ESRX:
Express Scripts Holding Company provides a range of pharmacy benefit management (PBM) services primarily in the United States and Canada. It offers healthcare management and administration services on behalf of its clients. ESRX has a PE ratio of 39.5. Currently there are 13 analysts that rate Express Scripts a buy, no analysts rate it a sell, and 3 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 $54.6 billion and is part of the health care sector and health services industry. The stock has a beta of 1.47 and a short float of 1.3% with 3.12 days to cover. Shares are up 23.7% year to date as of the close of trading on Thursday.
rates Express Scripts as a
. The company's strengths can be seen in multiple areas, such as its robust revenue growth, compelling growth in net income, good cash flow from operations, largely solid financial position with reasonable debt levels by most measures and increase in stock price during the past year. We feel these strengths outweigh the fact that the company has had somewhat disappointing return on equity.
Highlights from the ratings report include:
- ESRX's very impressive revenue growth greatly exceeded the industry average of 16.2%. Since the same quarter one year prior, revenues leaped by 114.5%. This growth in revenue does not appear to have trickled down to the company's bottom line, displayed by a decline in earnings per share.
- The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Health Care Providers & Services industry. The net income increased by 39.3% when compared to the same quarter one year prior, rising from $267.80 million to $373.00 million.
- Net operating cash flow has significantly increased by 81.77% to $963.60 million when compared to the same quarter last year. In addition, EXPRESS SCRIPTS HOLDING CO has also vastly surpassed the industry average cash flow growth rate of -19.72%.
- The debt-to-equity ratio is somewhat low, currently at 0.61, and is less than that of the industry average, implying that there has been a relatively successful effort in the management of debt levels. Despite the fact that ESRX's debt-to-equity ratio is low, the quick ratio, which is currently 0.55, displays a potential problem in covering short-term cash needs.
- EXPRESS SCRIPTS HOLDING CO's earnings per share declined by 18.2% in the most recent quarter compared to the same quarter a year ago. The company has suffered a declining pattern of earnings per share over the past two years. However, we anticipate this trend to reverse over the coming year. During the past fiscal year, EXPRESS SCRIPTS HOLDING CO reported lower earnings of $1.84 versus $2.52 in the prior year. This year, the market expects an improvement in earnings ($4.30 versus $1.84).
- You can view the full Express Scripts Ratings Report.