Express Scripts (ESRX) – Riding the Health Care Wave?

Express Scripts, a provider of pharmacy benefits management including retail management, card programs, home delivery, specialty and formulary management among other services has climbed to new 52 week highs as recently as yesterday. With the passage of a portion of the Obama Administrations Health Care Reform Bill, health care stocks in many sectors have rallied. But Express Scripts also shows great sales and earnings growth at a reasonable price.

The company’s stock has moved from $48.05 a share to a recent 52 week high of  $103.24 a share. More than doubling over the past 12 months. Revenue is growing 93% for this quarter and next quarter compared to the prior year numbers. While earnings is expanding roughly 28% this quarter and 35% next quarter, according to recent estimates. Analysts have bumped their earnings expectations over the past three months from $1.06 a share for first quarter of the year to $1.10 a share.

The price of the stock compared to its earnings (P/E) is 20.64 midway through the trading day today. When considering Express Scripts’ nearest quarters, this is a very reasonably priced stock. The 5 year growth rate is tempered at 19.6% which allows the PEG to be reported at a more standard ratio near 1. I believe the stock will continue to move higher with investors interested in industry due to the recent government action. The company will also report their first quarter earnings the last week of April, which should create additional interest from traders.

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