Extra Strength Solutions®
David “Sibo” Wang
Nelson Zhu
Company Profile
Medco operates the nation’s largest mail-order pharmacy operation.
Also works with local pharmacies Ranked in S&P 500 as 54th Averages 500 million prescription a year $42.5 billion in revenues $630.2 million in net income
3-month period
6-month period
1 year period
Strong Upward Trend
Increasing parabolic path
Good 2 touches on a linear trend line - Swing-Trade-Stocks.com 1) mid August 2) late October
Acquisition of PolyMedica
Bought Accredo Health for $2.3 billion in 2005 Focuses on complicated
medicines to address chronic, life-threatening diseases.
Acquired PolyMedica Corp (PLMD) for $1.2 billion to expand diabetes care services http://www.youtube.com/watch?v=lh_xzTECgjE
Profile (cont’d)
Acquired Polymedica (PLMD) on August 28th, causing PLMD stocks to soar
PLMD is a supplier of diabetes testing kits, expanded MHS’s horizons
14,800 employees
Acquisition of PolyMedica
Diabetics make up 5 percent of the U.S. population, but account for more than 15 percent of total drug spending
Already collaborated with positive results
The deal is expected to add slightly to Medco's earnings in 2008.
Why Pharmaceuticals?
1) A "must-repeat" purchase, high-margin business. no matter the economic
situation 2) Favorable world
demographics. 65+ years people use 3 - 4
times the prescription drugs of 30 year olds
The world population is aging. In the US, the group of people 65 or older will expand 17% by 2010, increasing the U.S. market beyond the current $105 billion level
3) Feel Good Factor Investing in company that
does good in the world makes you feel warm inside
4) Pharmaceutical company shares rose - The Associated Press End of October 2007after
the U.S. central bank's rate cut provided a small boost to the sector.
Why Medco?
Medco buys medicines for employers, unions and insurers Won’t be hurt by a fallback of
one drug Sales have risen for the
past seven quarters Analysts expect new
generics coming on the market to allow Medco to keep growing for several more years – seekingalpha.com
Bibliography
http://www.rttnews.com/sp/todaystop.asp?date=11/01/2007&item=44
http://www.chron.com/disp/story.mpl/ap/fn/5265828.html http://seekingalpha.com/article/27804-rob-black-s-healthcare-
stock-report http://www.ibtimes.com/articles/20070828/medco-polymedica-
acquisition.htm http://www.swing-trade-stocks.com/draw-trend-lines.html http://66.98.181.12/newsources/Nov1604a.htm http://www.fool.com/news/indepth/pharma/content/
pharmastocks.htm http://seekingalpha.com/symbol/mhs http://www.chron.com/disp/story.mpl/ap/fn/5261804.html