Catamaran Corp is a Pharmacy Benefits manager listed on the NASDAQ. With the Baby Boomer’s and the Affordable Care Act providing a moat for this business, it requires further due diligence.
Down and Dirty fundamental analysis-The fundamentals shows us a business trading at 33 times this years earnings and 18 times forward twelve month projected earnings. Keep in mind next years earnings are projected to grow a very conservative 18% versus 81% growth in the current year. In the previous five years earnings grew at 51%. I suggest you delve into the latest public filings.
Option Market-Today showed very bullish action in the January 15 50 and 52.5 strikes. 1552 calls traded verses and open interest of 1096 at 50 and 1870 traded at 52.5 versus and open interest of 816.
Technical Analysis-Both the one and three-year charts show a golden cross impending. That is, where the 50 day moving average crosses above the 200 day. The stock is also pushing into the gap created in March, so the action in this area is critical to a trading plan. We may also see resistance from its current price near 48 through its previous consolidation range at the beginning of the year. Of additional note would be the defined risk near 42 after the failed breakdown this year. The Stock had consolidated in a fairly tight range after the failed breakdown from March through May. The consolidation period created an ascending triangle, which the stock just broke out from. Bullish.
1 Year Chart
3 Year Chart
Based on my analysis of the technicals, fundamentals and option market action I believe this is a name worth watching as it works to fill a gap, completed a golden cross and works through resistance. Finally, this name may also be the target of a larger competitor, Express Scripts, but that is purely speculation.
Disc: Long CTRX