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GuruFocus Financial Strength Rank measures how strong a company’s financial situation is. It is based on these factors

1. The debt burden that the company has as measured by its Interest coverage (current year).
2. Debt to revenue ratio. The lower, the better
3. Altman Z-score.

A company ranks high with financial strength is likely to withstand any business slowdowns and recessions.

Financial Strength : 8/10

vs
industry
vs
history
Cash to Debt 0.14
ESRX's Cash to Debt is ranked higher than
58% of the 33 Companies
in the Global Health Care Plans industry.

( Industry Median: 0.53 vs. ESRX: 0.14 )
ESRX' s 10-Year Cash to Debt Range
Min: 0.09   Max: No Debt
Current: 0.14

Equity to Asset 0.41
ESRX's Equity to Asset is ranked higher than
73% of the 33 Companies
in the Global Health Care Plans industry.

( Industry Median: 0.39 vs. ESRX: 0.41 )
ESRX' s 10-Year Equity to Asset Range
Min: 0.13   Max: 0.55
Current: 0.41

0.13
0.55
Interest Coverage 5.96
ESRX's Interest Coverage is ranked higher than
54% of the 24 Companies
in the Global Health Care Plans industry.

( Industry Median: 8.28 vs. ESRX: 5.96 )
ESRX' s 10-Year Interest Coverage Range
Min: 2.78   Max: 396
Current: 5.96

2.78
396
F-Score: 6
Z-Score: 3.13
M-Score: -2.93
GuruFocus Profitability Rank ranks how profitable a company is and how likely the company’s business will stay that way. It is based on these factors:

1. Operating Margin
2. Trend of the Operating Margin (5-year average). The company with an uptrend profit margin has a higher rank.
••3. Consistency of the profitability
4. Piotroski F-Score
5. Predictability Rank•

The maximum rank is 10. A rank of 7 or higher means a higher profitability and may stay that way. A rank of 3 or lower indicates that the company has had trouble to make a profit.

Profitability Rank is not directly related to the Financial Strength Rank. But if a company is consistently profitable, its financial strength will be stronger.

Profitability & Growth : 8/10

vs
industry
vs
history
Operating margin (%) 3.41
ESRX's Operating margin (%) is ranked higher than
69% of the 32 Companies
in the Global Health Care Plans industry.

( Industry Median: 4.65 vs. ESRX: 3.41 )
ESRX' s 10-Year Operating margin (%) Range
Min: 2.76   Max: 6.06
Current: 3.41

2.76
6.06
Net-margin (%) 1.77
ESRX's Net-margin (%) is ranked higher than
62% of the 32 Companies
in the Global Health Care Plans industry.

( Industry Median: 2.89 vs. ESRX: 1.77 )
ESRX' s 10-Year Net-margin (%) Range
Min: -0.13   Max: 3.53
Current: 1.77

-0.13
3.53
ROE (%) 8.45
ESRX's ROE (%) is ranked higher than
62% of the 32 Companies
in the Global Health Care Plans industry.

( Industry Median: 10.83 vs. ESRX: 8.45 )
ESRX' s 10-Year ROE (%) Range
Min: -1.29   Max: 81.53
Current: 8.45

-1.29
81.53
ROA (%) 3.44
ESRX's ROA (%) is ranked higher than
66% of the 32 Companies
in the Global Health Care Plans industry.

( Industry Median: 3.84 vs. ESRX: 3.44 )
ESRX' s 10-Year ROA (%) Range
Min: -0.4   Max: 14.09
Current: 3.44

-0.4
14.09
ROC (Joel Greenblatt) (%) 214.10
ESRX's ROC (Joel Greenblatt) (%) is ranked higher than
87% of the 31 Companies
in the Global Health Care Plans industry.

( Industry Median: 134.04 vs. ESRX: 214.10 )
ESRX' s 10-Year ROC (Joel Greenblatt) (%) Range
Min: 31.83   Max: 576.28
Current: 214.1

31.83
576.28
Revenue Growth (%) 15.30
ESRX's Revenue Growth (%) is ranked higher than
79% of the 29 Companies
in the Global Health Care Plans industry.

( Industry Median: 13.70 vs. ESRX: 15.30 )
ESRX' s 10-Year Revenue Growth (%) Range
Min: 12   Max: 69.8
Current: 15.3

12
69.8
EBITDA Growth (%) 20.10
ESRX's EBITDA Growth (%) is ranked higher than
96% of the 25 Companies
in the Global Health Care Plans industry.

( Industry Median: 7.80 vs. ESRX: 20.10 )
ESRX' s 10-Year EBITDA Growth (%) Range
Min: 3.4   Max: 87.6
Current: 20.1

3.4
87.6
EPS Growth (%) 1.50
ESRX's EPS Growth (%) is ranked higher than
57% of the 23 Companies
in the Global Health Care Plans industry.

( Industry Median: 7.00 vs. ESRX: 1.50 )
ESRX' s 10-Year EPS Growth (%) Range
Min: 1.5   Max: 75.4
Current: 1.5

1.5
75.4
» ESRX's 10-Y Financials

Financials


Revenue & Net Income
Cash & Debt
Oprt. Cash Flow & Free Cash Flow

» Details

Guru Trades

Q2 2013

ESRX Guru Trades in Q2 2013

Jim Simons 94,539 sh (New)
Diamond Hill Capital 1,033,697 sh (+47.54%)
Pioneer Investments 1,443,008 sh (+28.05%)
Mario Gabelli 52,370 sh (+21.5%)
David Rolfe 3,408,739 sh (+17.17%)
Wallace Weitz 974,500 sh (+13.78%)
Glenn Greenberg 4,194,400 sh (+4.9%)
John Keeley 33,993 sh (+1.49%)
Ruane Cunniff 5,757 sh (unchged)
Jeff Auxier 78,174 sh (unchged)
Steven Romick -385,427 sh (unchged)
Jean-Marie Eveillard 1,168 sh (unchged)
RS Investment Management Sold Out
Richard Perry Sold Out
Leon Cooperman 2,736,327 sh (-0.16%)
Ken Fisher 614,761 sh (-4.81%)
Paul Tudor Jones 8,100 sh (-5.81%)
Jeremy Grantham 15,919,907 sh (-6.11%)
Chris Davis 14,462,627 sh (-9%)
Lee Ainslie 1,530,056 sh (-13.7%)
Steven Cohen 487,658 sh (-28.63%)
Ray Dalio 134,288 sh (-52.73%)
» More
Q3 2013

ESRX Guru Trades in Q3 2013

Scott Black 75,336 sh (New)
Joel Greenblatt 88,295 sh (New)
Louis Moore Bacon 7,994 sh (New)
Mario Gabelli 158,598 sh (+202.84%)
Lee Ainslie 4,184,162 sh (+173.46%)
Paul Tudor Jones 16,100 sh (+98.77%)
Ray Dalio 218,588 sh (+62.78%)
Steven Cohen 769,170 sh (+57.73%)
Pioneer Investments 1,830,022 sh (+26.82%)
David Rolfe 3,827,273 sh (+12.28%)
Ruane Cunniff 5,957 sh (+3.47%)
Wallace Weitz 982,255 sh (+0.8%)
Jean-Marie Eveillard 1,168 sh (unchged)
Steven Romick -385,427 sh (unchged)
Jeff Auxier 78,174 sh (unchged)
John Keeley 33,993 sh (unchged)
Jim Simons Sold Out
Diamond Hill Capital 1,030,043 sh (-0.35%)
Chris Davis 13,562,844 sh (-6.22%)
Ken Fisher 572,193 sh (-6.92%)
Jeremy Grantham 14,091,140 sh (-11.49%)
Glenn Greenberg 3,377,491 sh (-19.48%)
Leon Cooperman 1,902,798 sh (-30.46%)
» More
Q4 2013

ESRX Guru Trades in Q4 2013

Dodge & Cox 5,609,705 sh (New)
HOTCHKIS & WILEY 1,067,200 sh (New)
Paul Tudor Jones 88,800 sh (+451.55%)
Scott Black 173,883 sh (+130.81%)
Diamond Hill Capital 1,373,143 sh (+33.31%)
Mario Gabelli 197,214 sh (+24.35%)
Wallace Weitz 1,184,825 sh (+20.62%)
Glenn Greenberg 3,958,387 sh (+17.2%)
Pioneer Investments 2,137,569 sh (+16.81%)
Ken Fisher 616,320 sh (+7.71%)
David Rolfe 4,080,938 sh (+6.63%)
John Keeley 34,289 sh (+0.87%)
Ruane Cunniff 5,957 sh (unchged)
Jean-Marie Eveillard 1,168 sh (unchged)
Jeff Auxier 78,174 sh (unchged)
Steven Romick -385,427 sh (unchged)
Lee Ainslie Sold Out
Jeremy Grantham 13,804,543 sh (-2.03%)
Chris Davis 12,872,126 sh (-5.09%)
Louis Moore Bacon 7,495 sh (-6.24%)
Ray Dalio 142,688 sh (-34.72%)
Joel Greenblatt 34,242 sh (-61.22%)
Leon Cooperman 173,100 sh (-90.9%)
Steven Cohen 67,612 sh (-91.21%)
» More
Q1 2014

ESRX Guru Trades in Q1 2014

Manning & Napier Advisors, Inc 2,148,470 sh (New)
Steven Romick -385,427 sh (unchged)
Scott Black 167,414 sh (-3.72%)
Ken Fisher 337,475 sh (-45.24%)
» More
» Details

Insider Trades

Latest Guru Trades with ESRX

GuruDate Trades Impact to Portfolio Price Range * (?) Current Price Change from Average Current Shares
Lee Ainslie 2013-12-31 Sold Out 3.5%$60.88 - $70.6 $ 70.939%0
Glenn Greenberg 2013-12-31 Add 17.2%1.67%$60.88 - $70.6 $ 70.939%3958387
Leon Cooperman 2013-12-31 Reduce -90.9%1.64%$60.88 - $70.6 $ 70.939%173100
Scott Black 2013-12-31 Add 130.81%0.74%$60.88 - $70.6 $ 70.939%173883
Wallace Weitz 2013-12-31 Add 20.62%0.48%$60.88 - $70.6 $ 70.939%1184825
Dodge & Cox 2013-12-31 New Buy0.41%$60.88 - $70.6 $ 70.939%5609705
Joel Greenblatt 2013-12-31 Reduce -61.22%0.11%$60.88 - $70.6 $ 70.939%34242
Ray Dalio 2013-12-31 Reduce -34.72%0.04%$60.88 - $70.6 $ 70.939%142688
Mario Gabelli 2013-12-31 Add 24.35%0.01%$60.88 - $70.6 $ 70.939%197214
Glenn Greenberg 2013-09-30 Reduce -19.48%2.34%$60.94 - $67.66 $ 70.9310%3377491
Lee Ainslie 2013-09-30 Add 173.46%2.22%$60.94 - $67.66 $ 70.9310%4184162
Leon Cooperman 2013-09-30 Reduce -30.46%0.79%$60.94 - $67.66 $ 70.9310%1902798
Scott Black 2013-09-30 New Buy0.53%$60.94 - $67.66 $ 70.9310%75336
Joel Greenblatt 2013-09-30 New Buy0.18%$60.94 - $67.66 $ 70.9310%88295
Ray Dalio 2013-09-30 Add 62.78%0.04%$60.94 - $67.66 $ 70.9310%218588
Mario Gabelli 2013-09-30 Add 202.84%0.04%$60.94 - $67.66 $ 70.9310%158598
Richard Perry 2013-06-30 Sold Out 2.7%$55.26 - $63.6 $ 70.9318%0
Glenn Greenberg 2013-06-30 Add 4.9%0.56%$55.26 - $63.6 $ 70.9318%4194400
Wallace Weitz 2013-06-30 Add 13.78%0.29%$55.26 - $63.6 $ 70.9318%974500
Lee Ainslie 2013-06-30 Reduce -13.7%0.18%$55.26 - $63.6 $ 70.9318%1530056
Ray Dalio 2013-06-30 Reduce -52.73%0.08%$55.26 - $63.6 $ 70.9318%134288
Mario Gabelli 2013-06-30 Add 21.5%$55.26 - $63.6 $ 70.9318%52370
Glenn Greenberg 2013-03-31 Add 145.69%7.23%$53.36 - $59.77 $ 70.9326%3998341
Lee Ainslie 2013-03-31 Reduce -64.95%2.6%$53.36 - $59.77 $ 70.9326%1772991
Richard Perry 2013-03-31 Reduce -43.27%2.29%$53.36 - $59.77 $ 70.9326%1500000
Wallace Weitz 2013-03-31 Add 95.77%0.98%$53.36 - $59.77 $ 70.9326%856500
Ray Dalio 2013-03-31 Add 97.99%0.07%$53.36 - $59.77 $ 70.9326%284088
John Keeley 2013-03-31 New Buy0.04%$53.36 - $59.77 $ 70.9326%33493
Mario Gabelli 2013-03-31 Add 70.91%0.01%$53.36 - $59.77 $ 70.9326%43104
Premium More recent guru trades are included for Premium Members only!!
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Guru Investment Theses on Express Scripts

Wedgewood Partners Comments on Express Scripts - Apr 10, 2013

Although we have been investors in Express Scripts Holding Company (Express Scripts) (ESRX) since 2007, it was not always a "holding company." Express Scripts is the largest pharmacy benefits manager (PBM) in the country, managing nearly one third of all prescriptions written in the U.S. The Company recently (second quarter of 2012) rose to this market position after successfully closing the acquisition of Medco Health Solutions (Medco), effectively doubling the volume of prescriptions previously handled. Express Scripts' primary value proposition is to drive lower absolute and relative drug spend by injecting itself into almost every step of a clients' drug prescription process -­‐ from patient evaluation and distribution channels, to adherence. The Company's unparalleled scale and unique focus on the behavioral and clinical aspects of the drug prescription process enables them to effectively deliver an "open architecture" drug benefit which maximizes the opportunity for clients to eliminate spending waste. The Company's clients include managed care organizations, health insurers; mid-­‐to-­‐large employers and unions, all of whom are constantly bombarded by double-­‐digit medical care cost inflation.

In our view, Express Scripts' unmatched scale and unique approach are what will continue to reinforce its competitive profile for years to come. For example, throughout 2011 and part of 2012, one of Express Scripts' pharmacy network members, Walgreens, purportedly tried to raise prices on prescriptions, without adding any incremental value -­‐ which would have mitigated savings from cheaper, generic drugs coming to market over the next few years. Express Scripts saw these terms as unacceptable, and boldly removed Walgreens from its pharmacy network, yet clients still had access to another 50,000, lower-­‐priced pharmacy alternatives -­‐ from CVS and Rite Aide, to thousands of independent pharmacies. So Express Scripts' clients were able to make a wholesale move to these new pharmacies, with minimal disruption. Needless to say, the effect on Walgreens was not as subtle, almost 10% of its fiscal 2012 earnings per share were quickly lost as millions of prescriptions were shifted to cheaper competing pharmacies. Ultimately, Express Scripts re-­‐admitted the retailer back into its network in mid-­‐2012, presumably with economics that were more beneficial to clients. While this "narrow network" approach is not a new concept, it had never been done to this scale, but Express Scripts was able to be effective while excluding the largest pharmacy chain in the U.S., a testament to the Company's scale and competitive leadership.

As Express Scripts reaches critical mass in terms of prescriptions, we believe there is still room for attractive growth in profitability through further waste reduction and optimization of client behavior. Express Scripts' research estimates show that there is over $400 billion in pharmacy-­‐related waste every year. If the Company can continue to execute on its competitive advantage, we expect the Company to increasingly drive out more of this waste, and in turn, increase its profitability spread on each prescription (EBITDA/Rx).

In the interim, we expect Express Scripts will continue to be a prolific generator of free cash flow. Aside from information technology and a handful of automated drug distribution centers, there are few, large capital expenditure calls on the Company's operating cash flows. That said, in order to finance the Medco deal, Express Scripts issued debt -­‐ with about $13 billion (net of cash) currently on the balance sheet. We expect that they will be able to generate between $4 billion to $5 billion in free cash flow over the next twelve months – and increasing each year for the next several years. With about $6 billion in debt due by the end of 2015, and $2.8 billion cash currently on the balance sheet, Express Scripts should have ample financial firepower to reinvest in the business, pay down debt and provide share buy-­‐back support over the next few years. The Company ended the quarter at a market cap below $50 billion, when squared against our free cash flow estimates, results in a yield of about 10% which, relative to competing investment opportunities and given Express Scripts' opportunity set, we earnestly believe represents an excellent investment opportunity.

From Wedgewood Partners’ first quarter 2013 investor letter.


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Ratios

vs
industry
vs
history
P/E(ttm) 31.80
ESRX's P/E(ttm) is ranked higher than
55% of the 29 Companies
in the Global Health Care Plans industry.

( Industry Median: 14.90 vs. ESRX: 31.80 )
ESRX' s 10-Year P/E(ttm) Range
Min: 13.5   Max: 36.74
Current: 31.8

13.5
36.74
P/B 2.50
ESRX's P/B is ranked lower than
53% of the 30 Companies
in the Global Health Care Plans industry.

( Industry Median: 1.75 vs. ESRX: 2.50 )
ESRX' s 10-Year P/B Range
Min: 1.85   Max: 31.66
Current: 2.5

1.85
31.66
P/S 0.60
ESRX's P/S is ranked higher than
52% of the 33 Companies
in the Global Health Care Plans industry.

( Industry Median: 0.42 vs. ESRX: 0.60 )
ESRX' s 10-Year P/S Range
Min: 0.33   Max: 1.08
Current: 0.6

0.33
1.08
PFCF 13.40
ESRX's PFCF is ranked higher than
77% of the 30 Companies
in the Global Health Care Plans industry.

( Industry Median: 13.64 vs. ESRX: 13.40 )
ESRX' s 10-Year PFCF Range
Min: 8.82   Max: 25.77
Current: 13.4

8.82
25.77
EV-to-EBIT 18.90
ESRX's EV-to-EBIT is ranked higher than
55% of the 31 Companies
in the Global Health Care Plans industry.

( Industry Median: 9.96 vs. ESRX: 18.90 )
ESRX' s 10-Year EV-to-EBIT Range
Min: 8.9   Max: 30.4
Current: 18.9

8.9
30.4
PEG 1.30
ESRX's PEG is ranked higher than
80% of the 20 Companies
in the Global Health Care Plans industry.

( Industry Median: 1.77 vs. ESRX: 1.30 )
ESRX' s 10-Year PEG Range
Min: 0.42   Max: 1.56
Current: 1.3

0.42
1.56
Shiller P/E 34.50
ESRX's Shiller P/E is ranked higher than
55% of the 22 Companies
in the Global Health Care Plans industry.

( Industry Median: 17.27 vs. ESRX: 34.50 )
ESRX' s 10-Year Shiller P/E Range
Min: 22.6   Max: 67.21
Current: 34.5

22.6
67.21

Valuation & Return

vs
industry
vs
history
Price/DCF (Projected) 1.01
ESRX's Price/DCF (Projected) is ranked higher than
62% of the 24 Companies
in the Global Health Care Plans industry.

( Industry Median: 0.74 vs. ESRX: 1.01 )
ESRX' s 10-Year Price/DCF (Projected) Range
Min: 0.93   Max: 7.15
Current: 1.01

0.93
7.15
Price/Median PS Value 0.95
ESRX's Price/Median PS Value is ranked higher than
72% of the 32 Companies
in the Global Health Care Plans industry.

( Industry Median: 0.96 vs. ESRX: 0.95 )
ESRX' s 10-Year Price/Median PS Value Range
Min: 0.53   Max: 2.45
Current: 0.95

0.53
2.45
Price/Peter Lynch Fair Value 1.27
ESRX's Price/Peter Lynch Fair Value is ranked higher than
50% of the 16 Companies
in the Global Health Care Plans industry.

( Industry Median: 0.93 vs. ESRX: 1.27 )
ESRX' s 10-Year Price/Peter Lynch Fair Value Range
Min: 0.64   Max: 1.35
Current: 1.27

0.64
1.35
Earnings Yield (Greenblatt) 5.30
ESRX's Earnings Yield (Greenblatt) is ranked higher than
58% of the 33 Companies
in the Global Health Care Plans industry.

( Industry Median: 10.00 vs. ESRX: 5.30 )
ESRX' s 10-Year Earnings Yield (Greenblatt) Range
Min: 3.3   Max: 11.3
Current: 5.3

3.3
11.3
Forward Rate of Return (Yacktman) 28.86
ESRX's Forward Rate of Return (Yacktman) is ranked higher than
96% of the 24 Companies
in the Global Health Care Plans industry.

( Industry Median: 18.05 vs. ESRX: 28.86 )
ESRX' s 10-Year Forward Rate of Return (Yacktman) Range
Min: 21.6   Max: 37
Current: 28.86

21.6
37

Business Description

Industry: Health Care Plans » Health Care Plans
Compare:UNH, WLP, HUM, AET, CI » details
Traded in other countries:4XS.Germany
Express Scripts, Inc. was incorporated in Missouri in September 1986, and reincorporated in Delaware in March 1992. It operates as a Pharmacy benefit management in North America, offering a full range of services to its clients, which include HMOs, health insurers, third-party administrators, employers, union-sponsored benefit plans, workers' compensation plans and government health programs. It helps health benefit providers address access and affordability concerns resulting from rising drug costs while helping to improve healthcare outcomes. The Company manages the cost of the drug benefit by performing the following functions: evaluating drugs for price, value and efficacy in order to assist clients in selecting a cost-effective formulary; leveraging purchasing volume to deliver discounts to health benefit providers; promoting the use of generics and low-cost brands; and offering cost-effective home delivery pharmacy and specialty services which result in drug cost savings for plan sponsors and co-payment savings for members. It works with clients, manufacturers, pharmacists and physicians to increase efficiency in the drug distribution chain, to manage costs in the pharmacy benefit and to improve members' health outcomes and satisfaction. In an effort to deliver a superior clinical offering which targets the reduction of waste and the improvement of health outcomes, it applies a unique behavior-centric approach to changing consumer behavior which it calls Consumerology. It has organized its operations into two business segments based on products and services offered: PBM and Emerging Markets. The Company's PBM segment primarily consists of the following services: retail network pharmacy management and retail drug card programs; home delivery services; specialty benefit services; patient care contact centers; benefit plan design and consultation; drug formulary management, compliance and therapy management programs; information reporting and analysis programs; rebate programs; electronic claims processing and drug utilization review; administration of a group purchasing organization; consumer health and drug information; bio-pharma services including reimbursement and customized logistics solutions; improved health outcomes through personalized medicine and application of pharmacogenomics; and assistance programs for low-income patients. The EM segment primarily consists of the following services: distribution of pharmaceuticals and medical supplies to providers and clinics; and healthcare account administration and implementation of consumer-directed healthcare solutions.

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