Catamaran Corporation (NASDAQ:CTRX)

CAPS Rating: 5 out of 5

The Company provides healthcare information technology solutions and pharmacy benefit management services to the pharmaceutical supply chain in the US and Canada.

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Player Avatar TMFInnovator (20.67) Submitted: 5/7/2013 11:00:14 AM : Outperform Start Price: $51.89 CTRX Score: -34.50

Classic disruptor that has been successful. There is a lot to like in this business.Strengths- Transparent business model is disruptive to the traditional PBM market. - CTRX's technology is superior to competitors. - Now that they are established in difficult customer segments (public-sector institutions and state Medicaid claims), there are high switching costs for customers to leave.Opportunities - Healthcare reform is putting a lot of pressure on Managed Care Organizations to take costs out of the system (which would reduce costs to the final consumers). - The flood of generics into pharmaceuticals offers opportunity for PBM's to take additional costs out. Reducing costs is a huge opportunity for Catamaran. Their fixed-price, transparent business model is aligned with the direction the industry appears to be heading. If they can upsell to larger clients, they could go from disruptor to the industry standard.

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