Medco Health Solutions, Inc. (MHS)

This company is the industry dominator and is a great deal at $48 bucks a share. Customer satisfaction is top-notch, and they are playing in a game where insurance companies are pushing new customers their way every day. They acquired PolyMedica and Accredo. These two companies extend their customer base into specialty drugs and diabetic supplies. (The average diabetic uses 5-6 medications/day).

They signed the FEP program which added over 100,000 new prescriptions each month as well as other health groups in New York. This company is expanding rapidly!

Their before split stock was knocking $110, after split stock is hovering through the month of Jan '08 at $48-49. I have money in this company and I recommend this stock to do well in the next 3-5 years. Even through an economic downturn their patients will still rely on them for their livelihood.

I work with these companies daily in my day job as a practicing doc.

In terms of market share, responsiveness to patients and physicians, and back end, I am beginning to feel strongly that Medco is best of breed.

The major risk, I think, is regulatory risk - the current administration may decide to alter the face of American medicine, record-keeping, and/or prescription drug benefits in a way that doesn't benefit MHS.

I am not the decider, but I think I tend to doubt this will come to pass. If anything, I suspect Medco's model will be a basis for the shape of drug dispensing to come, and so they'll probably be able to fit into whatever the new administration has in mind.

Where oh where is that Godzilla bubble going next? Went from internet/telecom to construction/real estate/finance to commodities to ???

I say healthcare industry!

Thanks Mr. Greenspan and company. Your Mt. Everest money supply just keeps sloshing around, creating chaos wherever it goes!

For CAPS, I'm picking the entire healthcare sector.

OK, I bought in with the PE around 30ish, so clearly I'm bullish on Medco.

I'll concede that their valuation is underwhelming, north of where I usually like to get in. However, I feel they have a great chance for fairly moderate long term growth (if 20-30% is moderate in your book). That growth is interesting to me mostly because of the fact that I feel its pretty locked in.

All of the major healthcare payors can see where the prescription market is going. Why cut in the folks like CVS (of which there are numerous players), when you can get a low OH partner like a Medco? The payor gets a better price from folks like Medco and shares some of that with recipients like you and me, in order to pull our business away from the (expensive) pharmacy and reduce the payors overall cost.

I believe in the model. I believe the players like Medco are going to eat the pharmacies lunch over the long run. The traditional pharmacy model has gone obsolete and the Medcos of the world will be the inheritors (until some pharmacy changes the game again)

I think Medco is best of breed, and therefore my pick in this industry. My only regret is that I was slowe to see it and I didn't get in when the PE was 20.

With a forward PE of 20 and long term growth rate of 16%, MHS is right in line with its industry. A TTM PE of 26.5 x $4.73 next years earnings = $125. Even in the upcoming recession, people will need prescriptions and insurance companies will need to provide prescriptions in a cost effective manner.

"We're more comfortable in that kind of business. It means we miss a lot of very big winners. But we wouldn't know how to pick them out anyway. It also means we have very few big losers - and that's quite helpful over time. We're perfectly willing to trade away a big payoff for a certain payoff." - 1999 Berkshire Hathaway Annual Meeting

-Buffett

This company is ridiing a wave of population demographics that won't peak for another 15-20 years. Population ages, Government underwrites access to medication, pressure for cost containment increases, more managed-Medicare contracts, more business for the mail-order pharmacy industry. I can't imagine how this company will blow it unless it forgets how to contract. The margins don't have to be huge because the volume is virtually assured of going up, up, up....

Medco Health Solutions manages pharmacy benefits for numerous corporations and government entities. With the aging Baby Boomer population and the tendency toward better living through medication, it is unthinkable that such a company could fail to continue to grow.
Until the general public comes to the realization that good health begins with diet and exercise, the pharmaceutical business and all businesses related to it will see prosperous times.

Medco got ahead of itself and got beat up. Hopefully, its not a dead cat bounce...

I'm not sure about the future of this spinoff from Merck. It provides medication via many prescription drug benefit plans.

company has long ways to go the need for this service is huge

seems like it's the leader in its industry. also picked express scripts. p/e is high so this is not likely a good caps pick but i use the service as a watchlist. so don't follow my lead. i don't care about my score....

An abundance of generics hitting the market which is center to Medco's strategy for growth. Above average management team able to take advantage of other opportunities in the PBM and healthcare industries.

The population is just getting older and more people are going to need more drugs. There is a great deal of consolidation in the field and only the strong companies like this one will survive the fallout.

Escalating health care costs have been an issue for years, but now we increasingly have inflation in other areas. This seems likely to increase the demand to manage health care costs, which should play well for pharmacy benefit management companies.
We are likely to see a lot of bouncing around of the price of this stock because the health care sector seems to be getting pushed down during recent market downturns. This stock should be viewed as a long-term opportunity that will benefit from dollar-cost-averaging.

June Stock Advisor David Six Month Report Card Rated Buy

call this outperform for a year at least good short term to at a 50 target sell if you like what you see check out there numbers

Money maker. PLD made lots of real $, I think this one can too. Older population, more meds....

following my friends advice