Tag Archives: Express Scripts

$94 Billion Express Scripts Leverages Technology And Analytics To Improve Patient Outcomes

By Peter High

I recently had the opportunity to tour Express Scripts? Technology and Innovation Center in St. Louis. Express Scripts is a $94 billion pharmacy benefit management company (PBM), and as the company?s chief information officer, Gary Wimberly, likes to point out, it is a technology business that happens to be focused on the PBM space. The tour reflected that statement, as I had a chance to observe two key components of the company?s Technology and Innovation Center. …read more

Source: FULL ARTICLE at Forbes Health

Walgreens Stock Deserves a Spot in Your Portfolio

By Tamara Rutter, The Motley Fool

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Walgreens  stock has been on a roll this year, with shares up more than 29% year-to-date . This is an impressive run for a company that’s still recovering from its breakup and make-up with pharmacy benefits manager Express Scripts . However, the rise of generics, international growth, and the aging population should also play to Walgreens’ favor in the year ahead.

Top dividend stock
In addition to these catalysts, Walgreens is also one of the better dividend stocks to own. Walgreens stock pays an attractive quarterly dividend, and has done so without interruption for more than 80 years. Additionally, the company has earned its title as a dividend aristocrat by increasing its payout for 37 consecutive years. The stock‘s current dividend yield of 2.3% looks even better if you consider that over the last five years Walgreens stock has achieved a compound annual growth rate of nearly 24%.

The company’s long history of payouts helped shareholders remain calm during a turbulent 2012. Most of the upset was related to the fact that Walgreens said goodbye to about $5 billion in annual sales when it lost Express Scripts‘ business. Because the drugstore chain would no longer fill prescriptions for patients in the Express Scripts network, it ultimately forced its customers into the arms of the competition.

Lessons learned
CVS Caremark
and Rite Aid benefited the most from Walgreen’s fallout with Express Scripts. This is because at the time, both CVS and Rite Aid still accepted Express Scripts plans. The rival pharmacy retailers launched aggressive advertising campaigns that specifically targeted Walgreens customers whom held Express Scripts insurance .

It took Walgreens and Express Scripts nearly seven months to work out their differences — costing Walgreens billions in lost sales. However, the two companies finally reached a new multiyear agreement during July of last year. Walgreens stock soared more than 10% last year on that news alone.

Around the same time, investors were also busy dissecting the company’s acquisition of Alliance Boots. If you remember, Walgreens agreed to pay $6.7 billion in cash and stock for a 45% stake in the European drugstore chain.

Fast-forward to 2013
Today, Walgreens is proving that its 2012 purchase of Alliance Boots was less of a knee-jerk reaction to its Express Scripts woes, and more of a long-term play for international growth. Together with Boots, Walgreens inked a 10-year deal with pharmaceutical distributor AmerisourceBergen . As part of the agreement, AmerisourceBergen is giving Walgreens and Alliance Boots the option to buy a minority position in the company or as much as 7% of AmerisourceBergen’s outstanding stock. Walgreens and Alliance Boots also received warrants exerciseable for a 16% equity position in AmerisourceBergen .

Both Walgreens stock and shares of AmerisourceBergen climbed higher last month when the partnership was announced. With AmerisourceBergen now handling Walgreen’s branded and generic drug distribution, Walgreens should see increased efficiencies in its global pharmaceutical supply chain. Moreover, this

From: http://www.dailyfinance.com/2013/04/11/walgreens-stock-deserves-a-spot-in-your-portfolio/

Why Express Scripts Looks Healthy Long-Term

By Brian Pacampara, The Motley Fool

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Based on the aggregated intelligence of 180,000-plus investors participating in Motley Fool CAPS, the Fool’s free investing community, pharmacy benefit manager Express Scripts has earned a coveted five-star ranking.

With that in mind, let’s take a closer look at Express Scripts and see what CAPS investors are saying about the stock right now.

Express Scripts facts

Headquarters (founded)

St. Louis (1986)

Market Cap

$46.9 billion

Industry

Healthcare services

Trailing-12-Month Revenue

$93.9 billion

Management

Chairman/CEO George Paz

CFO Jeffrey Hall

Return on Equity (average, past 3 years)

28.7%

Cash/Debt

$2.8 billion / $15.9 billion

Competitors

Aetna
Cigna
Humana

Sources: S&P Capital IQ and Motley Fool CAPS.

On CAPS, 94% of the 844 members who have rated Express Scripts believe the stock will outperform the S&P 500 going forward.

Late last month, one of those bulls, All-Star NovaTodd, succinctly summed up the bull case for our community:

Accounting for the recent Medco acquisition, Express Scripts now does business with ~95% of retail pharmacies in the U.S., and possesses significant bargaining power in this relationship (see the Walgreen fiasco for evidence of this). They also have about 60% market share in the mail-order prescriptions business, fertile ground for future growth. Favorable demographic shifts, the closing of the “Medicare donut hole” and a recent share repurchase authorization are just a few more reasons this company is a long term winner.

If you want market-thumping returns, you need to put together the best portfolio you can. Of course, despite a strong five-star rating, Express Scripts may not be your top choice.

We’ve found another stock we are incredibly excited about — excited enough to dub it “The Motley Fool’s Top Stock for 2013.” We have compiled a special free report for investors to uncover this stock today. The report is 100% free, but it won’t be here forever, so click here to access it now.

 Want to see how well (or not so well) the stocks in this series are performing? Follow the TrackPoisedTo CAPS account.

The article Why Express Scripts Looks Healthy Long-Term originally appeared on Fool.com.

Fool contributor Brian Pacampara has no position in any stocks mentioned. The Motley Fool recommends Express Scripts. The Motley Fool owns shares of Express Scripts. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

Copyright © 1995 – 2013 The Motley Fool, LLC. All rights reserved. The Motley Fool has a disclosure policy.

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Source: FULL ARTICLE at DailyFinance

Express Scripts Gets "Mini-Tender" Offer

By Eric Volkman, The Motley Fool

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Express Scripts is attempting to resist the entry of a potential buyer. The company has received an unsolicited “mini-tender” offer for a block of its shares from TRC Capital, which has offered to buy up to 2 million shares of the company, roughly 0.24% of the outstanding amount, at $55.75 apiece.

Express Scripts is recommending that its shareholders reject the bid. It pointed out that TRC Capital’s offer was nearly 3% below the stock‘s closing price of $57.27 on April 8.

TRC Capital is known for its use of “mini-tender” offers, a practice that has aroused some controversy. Since such bids are for less than 5% of a company’s stock, they avoid numerous SEC procedural and disclosure requirements.

The article Express Scripts Gets “Mini-Tender” Offer originally appeared on Fool.com.

Fool contributor Eric Volkman has no position in Express Scripts. The Motley Fool recommends and owns shares of Express Scripts. Try any of our Foolish newsletter services free for 30 days. We Fools don’t all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

Copyright © 1995 – 2013 The Motley Fool, LLC. All rights reserved. The Motley Fool has a disclosure policy.

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Source: FULL ARTICLE at DailyFinance

Rite Aid Earnings: An Early Look

By Dan Caplinger, The Motley Fool

Filed under:

Earnings season has begun, and on Thursday, Rite Aid will release its latest quarterly results. The key to making smart investment decisions on stocks reporting earnings is to anticipate how they’ll do before they announce results, leaving you fully prepared to respond quickly to whatever inevitable surprises arise. That way, you’ll be less likely to make an uninformed knee-jerk reaction to news that turns out to be exactly the wrong move.

Rite Aid has been the third wheel of the U.S. drugstore industry for a long time, as it has struggled to reach profitability even as its main rivals have seen substantial growth in sales and earnings over the years. Can Rite Aid ever recover? Let’s take an early look at what’s been happening with Rite Aid over the past quarter and what we’re likely to see in its quarterly report.

Stats on Rite Aid

Analyst EPS Estimate

($0.02)

Year-Ago EPS

($0.18)

Revenue Estimate

$6.45 billion

Change From Year-Ago Revenue

(9.8%)

Earnings Beats in Past 4 Quarters

3

Source: Yahoo! Finance.

Does Rite Aid have the right prescription for its business?
Analysts have had mixed views on Rite Aid‘s prospects over the past few months. They’ve cut their initial break-even estimates for the company’s most recent quarter to a loss of $0.02 per share, but they’ve also boosted fiscal 2014 earnings estimates to a profit of $0.03 per share. The stock has focused on the longer-term view, as Rite Aid‘s share price has jumped more than 30% since the beginning of the year.

For a while last year, it looked as if Rite Aid might finally be turning the corner after a long period of weakness. A dispute between rival Walgreen and pharmacy benefit manager Express Scripts led to an exodus of customers away from Walgreen, and Rite Aid appeared to capture its share of those seeking to have their prescriptions filled elsewhere.

Since then, though, Rite Aid has sunk back into old bad habits. In March, it announced a 2% drop in same-store sales, with a drop in pharmacy sales of 4.5% more than offsetting a nearly 4% increase in revenue from the front-end of its stores. Yet even that front-end strength came largely from Easter’s coming in March rather than April this year, suggesting that the retailer’s results were even weaker than reported. Meanwhile, Walgreen has seen same-store sales grow as its new loyalty program attempts to win back customers from Rite Aid and CVS Caremark .

Rite Aid has fought back, though, seeking to match up to Walgreen and CVS by remodeling its stores. But because it is already debt-ridden, Rite Aid can’t afford to do store remodeling at a very fast pace, with Fool contributor Adam Levine-Weinberg arguing that it could take a decade for the company to finish all of its renovations.

In Rite Aid‘s quarterly report, watch for …read more

Source: FULL ARTICLE at DailyFinance

Why Your Next Doctor's Visit May Be a Trip to the Pharmacy

By Tamara Rutter, The Motley Fool

Filed under:

Next time you make a doctor’s appointment, it may be with your local drugstore. As if Obamacare hasn’t caused enough of a shakeup in health care, convenient care clinics across the U.S. now promise to diagnose, treat, and monitor patients with chronic illnesses. In fact, drugstore companies including Walgreen and CVS Caremark are at the forefront of this trend.

This could further disrupt an already rattled health care industry — particularly because the services provided by drugstore clinics are often more convenient and affordable than a doctor’s visit.

A dose of convenience
Walgreens is aggressively expanding the scope of services offered at its in-store Take Care Clinics. Last week, the country’s largest drugstore chain said it would begin treating patients with chronic conditions including asthma, diabetes, and high blood pressure.

This is a smart move for Walgreen at a time when the U.S. is facing a shortage of doctors. Not to mention, Obamacare will have a big impact on the health care industry next year as millions of previously uninsured people will gain coverage.

Meanwhile, rival pharmacy chain CVS is also putting a greater emphasis on treating patients at its walk-in clinics. CVS, which currently operates around 640 MinuteClinics, expects to have as many as 800 MinuteClinics by year’s end. While Walgreen’s footprint is a bit smaller with just 372 clinics now in operation, the company plans to open more locations in the year ahead. Of course, there’s a catch.

The doctor won’t see you
One thing to keep in mind are that these convenient care clinics, as they’re called, are not staffed by doctors but instead manned by nurse practitioners and physician assistants. While this may deter some customers, there’s something to be said about the flexibility of care clinics — most of which, are open extended hours and weekends.

With chronic care accounting for about three-quarters of health care spending, Walgreen’s push into this niche market should be a profit driver for the company down the road. It may even help Walgreen recover some of the customers it lost last year after the fallout with pharmacy benefits manager  Express Scripts .

Express Scripts, which provides a variety of pharmacy services including patient care and benefit management care, contributed about $5 billion in annual sales for Walgreen. However, when Walgreen dropped its contract with Express Scripts, it saw that revenue disappear along with tens of thousands of customers in the Express Scripts network. Fortunately, Walgreen settled the dispute with Express Scripts last year and inked a new multiyear deal with the company. Still, it’s been a slow climb for Walgreen as the pharmacy chain attempts to win back lost customers.

Moreover, by expanding the scope of services offered in its Take Care Clinics, Walgreen could see some of these lost customers return to its pharmacies. Going forward, Walgreen’s investment in its in-store clinics should start to pay off as more people ditch the doctor’s office for convenient …read more

Source: FULL ARTICLE at DailyFinance

Rite Aid Keeps Falling Behind

By Adam Levine-Weinberg, The Motley Fool

Filed under:

On Thursday morning, Rite Aid reported another month of lackluster sales results. For March, same-store sales were down 2%, whereas top competitor Walgreen reported a 0.7% increase in comparable-store sales. (The third pharmacy giant, CVS Caremark , does not report monthly sales.) Walgreen is continuing to recover strongly from last year’s dispute with Express Scripts , and the company appears to be winning market share back from Rite Aid. As a result, I expect Rite Aid‘s recent return to profitability to prove short-lived.

The details
Rite Aid‘s sales decline last month was comprised of a 3.8% increase in front-end sales and a 4.5% decrease in pharmacy same-store sales. Much of the decline can be explained by the introduction of various new generic drugs in the past year; generics are cheaper than brand-name drugs, but carry higher margins for pharmacies. It is perhaps more meaningful to look at prescription count, which does not differentiate between brand-name and generic drugs. On that basis, Rite Aid reported a modest 0.3% increase over the prior year.

On the other hand, Rite Aid estimated that front-end comparable-store sales benefited by 300 basis points due to the calendar shift of Easter into March. Stripping out all of the moving parts, it appears that Rite Aid‘s core sales growth is less than 1%, well below the pace seen for much of the last year.

Competition heats up
Much of Rite Aid‘s improved performance last year was a direct result of the commercial dispute between Walgreen and Express Scripts, which forced Express Scripts customers to fill their prescriptions elsewhere. While it is difficult to quantify the benefit seen by Rite Aid (and other Walgreen competitors), Rite Aid‘s management has admitted that pharmacy sales were boosted by the dispute last year. However, as of Sept. 15, 2012, Walgreen’s stores began to accept Express Scripts prescriptions again, and the company has a made a strong push since then to regain lost customers.

Whereas Rite Aid‘s prescription count in comparable stores increased by just 0.3% last month, Walgreen’s stores saw a 4% increase. Walgreen’s management also commented that “the percentage of former Express Scripts customers returning to its pharmacies continued to increase in March.”

Looking forward
Going forward, Rite Aid will continue to be squeezed by its two larger competitors, Walgreen and CVS. Now that Express Scripts customers are starting to return to Walgreen’s stores, Rite Aid is experiencing anemic sales growth. Furthermore, Walgreen and CVS are both expanding, while Rite Aid is gradually shrinking its store base. This trend will give Rite Aid‘s competitors even more economies of scale, while new CVS and Walgreen’s stores will likely target current Rite Aid customers.

Rite Aid stock is too speculative to recommend for most investors at this point in time. While Rite Aid‘s enterprise value of $8 billion is significantly below that of Walgreen ($49 billion) the lower valuation is fully justified by the company’s weak profitability. Rite Aid continues to face …read more

Source: FULL ARTICLE at DailyFinance

Walgreens March Sales Increase 2.3 Percent

By Business Wirevia The Motley Fool

Filed under:

Walgreens March Sales Increase 2.3 Percent

DEERFIELD, Ill.–(BUSINESS WIRE)– Walgreens (NYS: WAG) (NAS: WAG) had March sales of $6.16 billion, an increase of 2.3 percent from $6.02 billion for the same month in fiscal 2012.

Total front-end sales increased 5.4 percent compared with the same month in fiscal 2012, while comparable store front-end sales increased 4.2 percent. Customer traffic in comparable stores decreased 1.3 percent while basket size increased 5.5 percent.

Prescriptions filled at comparable stores increased by 4.0 percent in March and increased 7.4 percent on a calendar day-shift adjusted basis. This year’s March had one additional Sunday and one fewer Thursday compared with March 2012. In addition, Easter fell on March 31 this year compared with April 8 last year. These calendar shifts negatively impacted prescriptions filled at comparable stores by 3.4 percentage points.

The company said the percentage of former Express Scripts customers returning to its pharmacies continued to increase in March.

March pharmacy sales increased by 0.4 percent, while comparable store pharmacy sales decreased 1.5 percent but increased by a calendar day-shift adjusted 1.9 percent. Calendar day shifts negatively impacted pharmacy sales in comparable stores by 3.4 percentage points. Calendar day-shift adjusted comparable store pharmacy sales were negatively impacted by 4.8 percentage points due to generic drug introductions in the last 12 months. Pharmacy sales accounted for 62.2 percent of total sales for the month.

Sales in comparable stores increased by 0.7 percent in March. Calendar day shifts negatively impacted total comparable sales by 2.1 percentage points, while generic drug introductions in the last 12 months negatively impacted total comparable sales by 3.0 percentage points.

The company will report combined comparable store sales for March and April with its April sales results.

Registrations for Walgreens Balance® Rewards loyalty program, which launched in September, totaled more than 64 million through March.

Calendar 2013 sales to date were $18.09 billion, an increase of 2.3 percent from $17.68 billion in 2012.

Fiscal 2013 year-to-date sales for the first seven months were $42.12 billion, down 1.7 percent from $42.83 billion in the comparable period in fiscal 2012.

Walgreens opened 12 stores during March, including four relocations, and closed one.

On March 31, Walgreens operated 8,541 locations in all 50 states, the District of Columbia, Puerto Rico and Guam. …read more
Source: FULL ARTICLE at DailyFinance

Why Walgreen Is a Top Dividend Stock

By Dan Caplinger, The Motley Fool

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Investors have always been interested in stocks that pay dividends, but lately, low interest rates on bonds and other fixed-income investments have made solid dividend payers even more valuable. Among the most promising dividend stocks in the market is Walgreen , and one big reason is that it is one of the few exclusive companies to make the list of Dividend Aristocrats. In order to become a member of this elite group, a company must have raised its dividend payouts to shareholders every single year for at least a quarter-century. Only a few dozen stocks manage to make the cut, and those that do tend to stay there for a long time.

Walgreen has had its share of ups and downs over the past year, but things are starting to look up for the drugstore giant. Let’s take a closer look at Walgreen to see whether it can sustain its long streak of rewarding dividend payouts to investors.

Dividend Stats on Walgreen

Current Quarterly Dividend per Share

$0.275

Current Yield

2.3%

Number of Consecutive Years With Dividend Increases

37 years

Payout Ratio

47%

Last Increase

May 2012

Source: Yahoo! Finance. Last increase refers to ex-dividend date.

The latest on Walgreen
Walgreen suffered a lot during 2012, as its dispute with pharmacy benefits manager Express Scripts led to an exodus of customers to rival drugstore chains. Even after Walgreen and Express Scripts came to a resolution, Walgreen has had a tough time bringing those customers back.

Still, companies that manage to raise their dividends for decades all go through their share of challenges. So far, Walgreen has managed to keep its payouts strong:

WAG Dividend data by YCharts.

Moreover, Walgreen has taken some big steps to bolster growth. Its purchase of a 45% stake in Europe’s Alliance Boots drug chain last summer was part of its larger strategy to expand across the globe as it seeks to diversify and take advantage of better growth opportunities abroad. More recently, Walgreen’s move to replace Cardinal Health as its drug distributor in favor of a 10-year agreement with rival AmerisourceBergen will enhance its global distribution capacity, and Walgreen and Alliance will take an equity position in AmerisourceBergen as well to cement the partnership.

When will dividends rise again?
Last year, Walgreen raised its dividend during the spring, so investors should prepare for another increase in the near future. What’s more important in the long run, though, is whether its major strategic moves will lead to a return to stronger growth. If so, then Walgreen should remain a Dividend Aristocrat for a long, long time.

Walgreen’s dispute with Express Scripts shows just how important pharmacy-benefits management has become in a health care landscape dominated by searching for ways to control costs. Find out how Express Scripts is part of the solution by reading our premium research …read more
Source: FULL ARTICLE at DailyFinance

3 Reasons to Buy Express Scripts

By Jim Mueller and Austin Smith, The Motley Fool

Filed under:

In this video, Austin Smith interviews Jim Mueller, author of the Fool’s premium report on Express Scripts. Jim thinks the company is a buy for three reasons:

  • $290 billion of drugs are coming off-patent over the next five years, and the company can benefit from selling more profitable generics.
  • The U.S. and European populations are aging. 
  • Obamacare will bring many more people onto the rolls.

For more details, check out the video.

Do lower costs = profits for your portfolio?
In 2011, a massive shift began. With the first of the baby boomer generation reaching Medicare age, America’s health-care landscape was forever changed. Combine the aging population with the impact of Obamacare, and the need for innovative solutions for skyrocketing health-care costs is as clear as ever. Express Scripts is part of that solution, and in this brand-new premium report on the company, we clearly lay out the opportunity in front of this misunderstood stock. Claim your copy by clicking here now.

var FoolAnalyticsData = FoolAnalyticsData || []; FoolAnalyticsData.push({ eventType: “TickerReportPitch”, contentByline: “Jim Mueller and Austin Smith“, contentId: “cms.25980”, contentTickers: “NYSE:PFE, NYSE:MRK, NASDAQ:ESRX”, contentTitle: “3 Reasons to Buy Express Scripts“, hasVideo: “True”, pitchId: “85”, pitchTickers: “NASDAQ:ESRX”, …read more
Source: FULL ARTICLE at DailyFinance

Express Scripts Investors: 3 Key Things You Should Be Watching

By Jim Mueller and Austin Smith, The Motley Fool

Filed under:

Express Scripts claims to be the No. 1 company in the mail order prescription business. In this video, Fool analyst Jim Mueller explains the Express Scripts business and the three things investors need to watch. Mail order prescriptions are attracting the attention of big pharma and generics alike, and how well Express Scripts penetrates these markets is critical to its future success.

Do lower costs = profits for your portfolio?
In 2011, a massive shift began. With the first of the baby-boomer generation reaching Medicare age, America’s health care landscape was forever changed. Combine the aging population with the impact of Obamacare, and the need for innovative solutions for skyrocketing health care costs is as clear as ever. Express Scripts is part of that solution, and in this brand new premium report on the company, we clearly lay out the opportunity in front of this misunderstood stock. Claim your copy by clicking here now.

var FoolAnalyticsData = FoolAnalyticsData || []; FoolAnalyticsData.push({ eventType: “TickerReportPitch”, contentByline: “Jim Mueller and Austin Smith“, contentId: “cms.25977”, contentTickers: “NYSE:PFE, NYSE:GSK, NASDAQ:ESRX”, contentTitle: “Express Scripts Investors: 3 Key Things You Should Be Watching”, hasVideo: “True”, pitchId: “85”, pitchTickers: “NASDAQ:ESRX”, …read more
Source: FULL ARTICLE at DailyFinance

1 Opportunity for Express Scripts Investors

By Jim Mueller and Austin Smith, The Motley Fool

Filed under:

Express Scripts manages payments between pharmacy prescription plans and insurance companies, as well as helping select name-brand versus generic drugs. In this video, Fool analyst Jim Mueller explains how the expiration of several big pharma drugs could open up a big opportunity for Express Scripts.

Do lower costs = profits for your portfolio?
In 2011, a massive shift began. With the first of the baby-boomer generation reaching Medicare age, America’s health care landscape was forever changed. Combine the aging population with the impact of Obamacare, and the need for innovative solutions for skyrocketing health care costs is as clear as ever. Express Scripts is part of that solution, and in this brand new premium report on the company, we clearly lay out the opportunity in front of this misunderstood stock. Claim your copy by clicking here now.

var FoolAnalyticsData = FoolAnalyticsData || []; FoolAnalyticsData.push({ eventType: “TickerReportPitch”, contentByline: “Jim Mueller and Austin Smith“, contentId: “cms.25974”, contentTickers: “NYSE:PFE, NYSE:GSK, NYSE:UNH, NYSE:LLY, NASDAQ:ESRX”, contentTitle: “1 Opportunity for Express Scripts Investors”, hasVideo: “True”, pitchId: “85”, pitchTickers: “NASDAQ:ESRX”, …read more
Source: FULL ARTICLE at DailyFinance

3 Health Care Stories You Probably Missed

By Brandy Betz, The Motley Fool

Filed under:

This year, health care stocks are leading the S&P 500 for the first time in well over a decade.
It’s a vote of confidence in a landscape that’s changing around the Affordable Care Act. While the more speculative biotech industry gets attention from The Fool

elsewhere

, here’s a look at the top stories from the less-sung parts of health care.

As we begin the last mini-week of the month, the news was as mixed as the Northeast weather. A drug store made a distribution power play. An insurer fell on Medicare nervousness. And a health care information technology company branched out with a new acquisition.

Walgreen  announced that it was signing a 10-year contract with drug distributor AmerisourceBergen , and had an option of buying a 7% stake. That left its former primary distributor Cardinal Health out in the cold, and shares dropped accordingly. The move will increase the drugstore chain’s prices on both branded and generic drugs, which should lead to higher profit margins.

Also coming along for the ride was European chain Alliance Boots, which Walgreen’s partially acquired last year. Combined, the moves will improve Walgreen’s market position and perhaps its bargaining power with pharmacy benefit managers such as Express Scripts .

Turning towards the health plan side of things…

Humana closed the week down almost 4% after a Susquehanna analyst lowered the company’s rating from “Positive” to “Neutral,” citing concerns with potential Medicare Advantage rate cuts. The company’s shares had dropped 10% last month when the Centers for Medicare and Medicaid Services’ announced its proposed rates, which could lead to losses of $11 billion across Advantage providers. Humana is one of the segment leaders, with 2 million Advantage customers. Expect further volatility in health care plans this week since the final rate decision is due next Monday.

And rounding out the week’s review, Cerner Corporation acquired Labotix Automation, which provides automation solutions in clinical testing environments. The details weren’t disclosed. It’s the latest in a string of acquisitions for Cerner, which is diversifying its business as the spending boost from the 2009 stimulus winds down and the ACA kicks in. Cerner finished the week up less than 1%, but this is a stock meant for the long haul.

Do lower costs = profits for your portfolio?
In 2011, a massive shift began. With the first of the baby-boomer generation reaching Medicare age, America’s health care landscape was forever changed. Combine the aging population with the impact of Obamacare, and the need for innovative solutions for skyrocketing health care costs is as clear as ever. Express Scripts is part of that solution, and in this brand new premium …read more
Source: FULL ARTICLE at DailyFinance

What Are the Risks With Express Scripts?

By Jim Mueller and Austin Smith, The Motley Fool

Filed under:

What can go wrong with Express Scripts? In the following video, Jim Mueller outlines the two biggest risks: an insurance company switching to a competitor, and government regulations. Insurance companies are always looking for a better deal, so Express Scripts is always vulnerable to losing an account. And government regulations constantly increase and could limit revenues.

For more, check out the video.

Do lower costs = profits for your portfolio?
In 2011, a massive shift began. With the first of the baby boomer generation reaching Medicare age, America’s health-care landscape was forever changed. Combine the aging population with the impact of Obamacare, and the need for innovative solutions for skyrocketing health-care costs is clearer than ever. Express Scripts is part of that solution, and in this brand-new premium report on the company, we clearly lay out the opportunity in front of this misunderstood stock. Claim your copy by clicking here now.

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Source: FULL ARTICLE at DailyFinance

An Easy Way to Zero In on the Growing Large- and Mid-Cap Markets

By Selena Maranjian, The Motley Fool

Filed under:

Exchange-traded funds offer a convenient way to invest in sectors or niches that interest you. If you’d like to add some sizable companies to your portfolio, the Guggenheim Russell 1000 Equal Weight ETF could save you a lot of trouble. Instead of trying to figure out which companies will perform best, you can use this ETF to invest in lots of them simultaneously. It weights its holdings equally, instead of by market cap, as many indexes do.

The basics
ETFs often sport lower expense ratios than their mutual fund cousins. The Guggenheim ETF‘s expense ratio — its annual fee — is a relatively low 0.42%. The fund is fairly small, too, so if you’re thinking of buying, beware of possibly large spreads between its bid and ask prices. Consider using a limit order if you want to buy in.

This ETF is too young to have a sufficient track record to assess. As with most investments, of course, we can’t expect outstanding performances in every quarter or year. Investors with conviction need to wait for their holdings to deliver.

Why large companies?
Large companies can add some ballast to your collection. Many may not grow as briskly as their smaller counterparts, but to reach their current size, they probably have some strong assets and features. And some can grow quite briskly, too. This ETF focuses on ones that seem undervalued according to some measures, which can boost the overall margin of safety for the basket.

More than a handful of large- and mid-cap companies had solid performances over the past year. Walgreen surged 41%, finally moving on from its now-resolved snit with pharmacy benefits manager Express Scripts. Its pharmacy volume is picking up, and it has invested heavily in international growth, via a purchase of Europe-based Alliance Boots. It has also entered into a promising alliance with U.S. drug wholesaler AmerisourceBergen.

Tyson Foods gained 25%, recently hitting a 52-week high despite margin compression due to rising prices. It also may be affected by Washington’s sequester, which is furloughing USDA meat inspectors, which can slow down business — though Tyson isn’t too worried about that. Management is bullish for its longer-term prospects, and Tyson’s forward P/E ratio of 9 is intriguing.

Other companies didn’t do as well last year but could see their fortunes change in the coming years. Food giant Archer Daniels Midland gained 5%, but some analysts, such as those at BMO Capital Markets, see it as a bit overvalued now; BMO cut its rating to market perform. The company recently raised its dividend by 9%, and it now yields 2.3%. In February, it posted strong second-quarter results, despite weak corn processing numbers.

A market darling not so long ago, Green Mountain Coffee Roasters added 3%. Investors have been worried about the patent expiration for its K-Cups, but the company has continued signing big …read more
Source: FULL ARTICLE at DailyFinance

Why the Health Care Arms Race Hurts This Stock

By Brenton Flynn, The Motley Fool

Filed under:

From revolutionary science to the impact of Obamacare, every week The Motley Fool’s health care team sits down to discuss the most fascinating developments across the health care industry and their implications for long-term investors. In this week’s edition, the team talks about the disruptive potential of a new iPhone app, as well as an FDA inquiry that could have negative implications for some of the pharmaceutical industry’s biggest players. In addition, our analysts dive into some of the stocks making big moves over the past week and discuss companies on their radar for the near future.

In the following segment, health care bureau chief Brenton Flynn discusses a big customer loss for medical distributor Cardinal Health  and why it doesn’t worry him as much as another ongoing development — industry consolidation.

We know what’s eating at companies like Cardinal Health, but what macro trend was Warren Buffett referring to when he said “this is the tapeworm that’s eating at American competitiveness”? Find out in our free report: “What’s Really Eating At America’s Competitiveness.” You’ll also discover an idea to profit as companies work to eradicate this efficiency-sucking tapeworm. Just click here for free, immediate access.

The relevant video segment can be found between 10:55 and 12:42.

The article Why the Health Care Arms Race Hurts This Stock originally appeared on Fool.com.


Brenton FlynnDavid Williamson, and Max Macaluso, Ph.D. has no position in any stocks mentioned. The Motley Fool recommends Express Scripts. The Motley Fool owns shares of Express Scripts. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

Copyright © 1995 – 2013 The Motley Fool, LLC. All rights reserved. The Motley Fool has a disclosure policy.

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Source: FULL ARTICLE at DailyFinance

3 Reasons to Sell Express Scripts?

By Jim Mueller and Austin Smith, The Motley Fool

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Express Scripts  investors need to consider some of the risks in buying shares of the company. In this video, Fool Jim Mueller outlines three risks to the company’s future health. Acquisitions, for example, may be more difficult to come by as Express Scripts could be viewed as having a monopoly on the pharmacy management business. Will the economy discourage new customers? Will synergies be achieved with its acquisitions? Investors need to think about these matters before jumping in.

The article 3 Reasons to Sell Express Scripts? originally appeared on Fool.com.


Austin Smith and Jim Mueller have no position in any stocks mentioned. The Motley Fool recommends and owns shares of Express Scripts. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

Copyright © 1995 – 2013 The Motley Fool, LLC. All rights reserved. The Motley Fool has a disclosure policy.

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Source: FULL ARTICLE at DailyFinance

Why Cardinal Health Dropped

By Brandy Betz, The Motley Fool

Filed under:

Cardinal Health shares dropped more than 10% this week after Walgreen announced it wouldn’t renew its contract with the drug distributor. The nonrenewal will slice into Cardinal’s revenues, but bad news could get worse if CVS Caremark follows suit.

How bad?
Walgreen was Cardinal’s second largest customer, accounting for 21% of fiscal 2012 revenues. The retail chain left to buy a stake in AmerisourceBergen  — the same competitor that gained Express Scripts last summer. Express Scripts had been Cardinal’s third largest customer, but it decided to go elsewhere following its multibillion-dollar acquisition of Medco.

So it hasn’t been a great year for Cardinal. CVS remains as the largest customer, representing 22% of revenues, but that contract expires this summer. Will CVS opt for nonrenewal? It’s possible, but CVS has caught Cardinal vulnerable — and that’s a good time for bargaining.

What can Cardinal do to fight back? There’s the possibility of pursuing smaller pharmacies for contracts. And the medical segment recently grew with the $2.1 billion acquisition of AssuraMed. That gave Cardinal a foot in the home medical supply market with a company that had a million patients and about $1 billion in 2012 revenues.

It’s better than nothing, but doesn’t seem likely to replace these big league losses.

Financial impact
Walgreen’s existing contract doesn’t expire until after the end of fiscal 2013. Right now, Cardinal’s putting the 2014 forecast in line with this year’s EPS range of $3.42 to $3.50. But expect revisions in the near future, particularly if CVS leaves.

Foolish final thoughts
I’ve backed my doubts with a CAPScall of underperform for Cardinal Health.

Cardinal claims it has plans in place to mitigate Walgreen’s loss, but didn’t provide any details. If CVS does leave, Cardinal shares will plummet. But even if CVS stays, the distributor will have to try to redefine itself in a lower market position.

The company’s best chance is to rebid on the deserting companies once the replacement contracts expire. Express Scripts only had a three-year contract, but it’ll be a decade before Walgreen’s deal with AmerisourceBergen expires.

Do lower costs = profits for your portfolio?
In 2011, a massive shift began. With the first of the baby-boomer generation reaching Medicare age, America’s health care landscape was forever changed. Combine the aging population with the impact of Obamacare, and the need for innovative solutions for skyrocketing health care costs is as clear as ever. Express Scripts is part of that solution, and in this brand new premium report on the company, we clearly lay out the opportunity in front of this misunderstood stock. Claim your copy by clicking here now.

var FoolAnalyticsData …read more
Source: FULL ARTICLE at DailyFinance

Walgreen Earnings And New ABC Deal Lift Its Drug Sales Outlook

By Trefis Team, Contributor

Quick Take Walgreen reports flat revenues at $18.6 billion with net profit up about 11% to $756 million The company also announced a 10-year agreement with pharmacy services provider AmerisourceBergen Sales helped by growth in prescriptions filled mitigating the negative impact of growing generic drug introductions Front end sales take a hit despite the company launching more new format stores Growth in generic prescription drug introductions and the new agreement with AmerisourceBergen will further help the company’s growing margins The return of Express Scripts prescriptions and growth in generic prescription drugs dispensed saw the largest drugstore chain in the U.S. Walgreen post a growth in profits in the quarter ending February. Fiscal 2013 second quarter net earnings were $756 million compared with net earnings of $683 million in the year ago quarter. Revenues from the quarter were flat at $18.6 billion. The strong performance saw the company’s stock price rise by 5.4% in a day. Walgreen along with Alliance Boots GmbH announced a 10-year distribution agreement with AmerisourceBergen (ABC) beginning September 1. The former have also been granted rights to buy up to a 23% stake in the latter. AmerisourceBergen is a pharmacy services provider and will distribute branded pharmaceutical products that Walgreen has historically distributed, and it will help Walgreen source and distribute generic drugs internationally potentially bringing both growth and better purchasing power with drug manufacturers. Beginning calendar year 2014, this will increasingly include generic pharmaceutical products that Walgreen has so far self-distributed. Walgreen currently operates at 8,537 locations, including 8,072 drugstores and competes for prescriptions with CVS Caremark and Rite Aid among others. View our analysis for Walgreen …read more
Source: FULL ARTICLE at Forbes Latest