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