Based on the aggregated intelligence of 120,000 investors participating in Motley Fool CAPS, the Fool's free investing community, pharmacy benefit manager Medco Health Solutions (NYSE:MHS) has earned a coveted five-star ranking. Our data has shown that five-star stocks outperform the market by a significant margin; conversely, one-star stocks have woefully lagged the market average.

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

Medco facts


Headquarters (Founded)

Franklin Lakes, New Jersey (1983)

Market Cap

$19.89 billion


Health-care services

TTM Revenue

$48.03 billion


CEO David Snow Jr. (since March 2003),

CFO Richard J. Rubino (since March 2008)

Return on Equity (average last three years)



Express Scripts (NASDAQ:ESRX),

CVS Caremark (NYSE:CVS)

CAPS members bullish on MHS also bullish on

Johnson & Johnson (NYSE:JNJ),

General Electric (NYSE:GE)

CAPS members bearish on MHS also bearish on

Bank of America (NYSE:BAC),

SunTrust Banks (NYSE:STI)

Sources: Capital IQ, a division of Standard & Poor's, and Motley Fool CAPS. TTM = trailing 12 months.

Over on CAPS, fully 716 of the 738 members who have rated Medco -- some 97% -- believe the stock will outperform the S&P 500 going forward. These Foolish bulls include aracer and reidmp, both of whom are ranked in the top 25% of our community.

Just last week, aracer had positive things to say about the stock:

Good company, well positioned in front of a coming wave (geriatrics/manged care/insurance cost controls), good chance of long term growth in the 20% range, trading 70% below its 52 week high, in a recession-proof niche.

An earlier pitch in June from reidmp follows that line of thinking, focusing on Medco's attractive long-term tailwinds:

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.

What do you think about Medco, or any other stock for that matter? Make your voice heard on Motley Fool CAPS today. More than 120,000 investors are waiting to hear what you have to say. CAPS is 100% free, so simply click here to get started.

Fool contributor Brian Pacampara owns no position in any of the companies mentioned. Medco Health is a Motley Fool Stock Advisor recommendation. Johnson & Johnson and Bank of America are Income Investor selections. The Fool's disclosure policy always gets a perfect score.