Why Catamaran Is Poised to Keep Sailing

Based on the aggregated intelligence of 180,000-plus investors participating in Motley Fool CAPS, the Fool's free investing community, health care IT services specialist Catamaran (NASDAQ: CTRX  ) has earned a respected four-star ranking.  

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

Catamaran facts

Headquarters (founded)

Lisle, Ill. (1993)

Market Cap

$10.7 billion

Industry

Health care services

Trailing-12-Month Revenue

$11.4 billion

Management

Chairman/CEO Mark Thierer
CFO Jeffrey Park

Return on Equity (average, past 3 years)

11.3%

Cash / Debt

$311.4 million / $1.1 billion

Competitors

Caremark Pharmacy Services
Cerner
Express Scripts

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

On CAPS, 95% of the 384 members who have rated Catamaran believe the stock will outperform the S&P 500 going forward.

Just yesterday, one of those Fools, TMFInnovator, succinctly summed up the Catamaran bull case for our community:

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.  

If you want market-thumping returns, you need to put together the best portfolio you can. Of course, despite a strong four-star rating, Catamaran 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.


Read/Post Comments (0) | Recommend This Article (0)

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

Be the first one to comment on this article.

Sponsored Links

Leaked: Apple's Next Smart Device
(Warning, it may shock you)
The secret is out... experts are predicting 458 million of these types of devices will be sold per year. 1 hyper-growth company stands to rake in maximum profit - and it's NOT Apple. Show me Apple's new smart gizmo!

DocumentId: 2417028, ~/Articles/ArticleHandler.aspx, 12/22/2014 8:04:28 PM

Report This Comment

Use this area to report a comment that you believe is in violation of the community guidelines. Our team will review the entry and take any appropriate action.

Sending report...

Today's Market

updated Moments ago Sponsored by:
DOW 17,959.44 154.64 0.87%
S&P 500 2,078.54 7.89 0.38%
NASD 4,781.42 16.04 0.34%

Create My Watchlist

Go to My Watchlist

You don't seem to be following any stocks yet!

Better investing starts with a watchlist. Now you can create a personalized watchlist and get immediate access to the personalized information you need to make successful investing decisions.

Data delayed up to 5 minutes

Related Tickers

12/22/2014 4:00 PM
CTRX $50.50 Up +0.21 +0.42%
Catamaran CAPS Rating: *****
CERN $65.04 Up +0.67 +1.04%
Cerner Corp CAPS Rating: ****
ESRX $82.34 Up +1.37 +1.69%
Express Scripts CAPS Rating: *****

Advertisement