ESRX

Express Scripts Holding Co

Healthcare, Event Driven/Special Sit


Presented:03/23/2016
Price:$67.33
Cap:$45.97B
Current Price:$92.33
Cap:$52.06B

Presented

Date03/23/2016
Price$67.33
Market Cap$45.97B
Ent Value$72.09B
P/E Ratio18.81x
Book Value$25.67
Div Yield0%
Shares O/S0.00M
Ave Daily Vol5,633,342
Short Int8488739.28%

Current

Price$92.33
Market Cap$52.06B
Express Scripts Holding Co. is a holding company that operates through its two wholly owned subsidiaries, Express Scripts, Inc. and Medco Health Solutions, Inc. The company provides pharmacy benefit management services and clinics healthcare account administration services in North America. It also offers full range of services to its clients, which include managed care organizations, health insurers, third-party administrators, employers, union-sponsored benefit plans, worker's compensation plans and government health programs. The company operates its business through two segments: Pharmacy Benefit Management (PBM) and Other Business Operations. The Pharmacy Benefit Management segment provides domestic and Canadian retail network pharmacy management, home delivery pharmacy services, benefit design consultation and drug utilization review. The Other Business Operations segment provides distribution of pharmaceuticals and medical supplies to providers and clinics, scientific evidence to guide the safe, effective and affordable use of medicines. Express Scripts Holding was founded on July 15, 2011 and is headquartered in St. Louis, MO.

Publicly traded companies mentioned herein: Anthem Inc (ANTM), Express Scripts Holding Company (ESRX), Walgreens Boots Alliance (WBA)

Highlights

The recently filed lawsuit by Anthem against Express Scripts (ESRX) underscores the issues facing the company at this time, and makes the stock a more “relevant” short. However, putting the lawsuit aside, the presenter said he was already bearish on the outlook for the largest pharmacy benefit manager due to the structural shifts happening in the US healthcare industry. ESRX is in the business of fulfilling prescriptions, which “has very little future as a standalone”, in his opinion. Specific to ESRX, he sees the company as more of an “earnings management story versus a true partner in care”, and “that’s a very bad sign”. If his thesis proves to be accurate, negative earnings leverage could cause a meaningful decline in the stock price over the next 12-24 months.

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Idea Discussion

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