NEW YORK ( TheStreet) - Medco Health Solutions ( MHS) and Intuitive Surgical ( ISRG) both hit 52-week highs on Monday. Both stocks are rated buy at TheStreet Ratings.
Medco Health Solutions The pharmacy benefit manager got a boost as expectations grew that it would be able to complete its planned merger with Express Scripts ( ESRX), according to The Wall Street Journal, which cited a report by anti-trust research firm MLex as saying it expects the combination to win anti-trust approval. The company also reported its above-consensus fourth-quarter earnings last week. "New business trends were more positive than we expected, as the company has won $2.6 billion in gross new business in 2012," William Blair analysts wrote in a Feb. 21 report. "While net new wins are still negative for the year (given previously disclosed losses), there have been no new significant losses since the third-quarter call, suggesting net new business wins over the past three months were also about $1 billion." Shares of Medco Health Solutions hit a 52-week high of $68.40. The stock's 52-week low of $44.60 was set on Oct. 4. Medco Health Solutions has an estimated price-to-earnings ratio for next year of 14.06; the average for health care providers is 18.75. For comparison, both WellPoint ( WLP) and Express Scripts ( ESRX) have lower forward P/Es of 7.77 and 12.8 respectively. Twelve of the 22 analysts who cover Medco Health Solutions rate it at buy; 10 analysts give the stock a hold rating. TheStreet Ratings gives Medco Health Solutions a B grade with a buy rating and $73.98 price target. The stock has risen 19.3% year to date.