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Express Scripts Holding Company Message Board

  • chrishasty_1982 chrishasty_1982 Dec 10, 2009 5:16 PM Flag

    Question for seasoned shareholders

    Thinking about buying, but wanted to ask opinion's from existing owners. What is your take on current price for this stock. I plan to investigate further, but at a quick glance they list total equity at 3.3 billion, but I think it's a bit of a surprise upon further investigation that they list 3.2 billion of that as Good-will and intangibles. According to what I've read they have had declining income for the last 2 quarters and are selling at almost 30 times earnings. What factors are supporting the price at this level?

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    • GAAP financials mask true profitability. Look at script growth and EBITDA per script. The reason the valuation is expanding is because the NextRx acquisition is going to be a huge driver of earnings growth and by the time its integrated the biggest year ever for patent expirations will be upon us. they are going to go from earning under $4 this year to around $7.5 by 2012. What other large cap has that kind of earnings ramp ahead of it?

      • 1 Reply to whygoelswhere
      • Thank you, those are some strong supporting points for the price. Does it make you a little leery that the current price is so high that even if it doubled it's earnings the p/e ratio would still be higher than many large caps with 20+ years of steady dividend records and massively larger book values? (example HON) I just wonder if recent price action has made put ESRX in a position to where it would have to meet the loftiest expectations to even be fairly valued compared to many other large caps.

 
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