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 (CTRX.DL) 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 |
Return on Equity (average, past 3 years) |
11.3% |
Cash / Debt |
$311.4 million / $1.1 billion |
Competitors |
Caremark Pharmacy Services |
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.