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4 Deeply Discounted Value Stocks on Sale This Summer

Senior Looking At Prescripton Drugs In Medicine Cabinet Getty
Senior Looking At Prescripton Drugs In Medicine Cabinet Getty

That's the short-term bad news. The good news is there are plenty of reasons to buy and hold Express Scripts without too much worry.

Image source: Getty Images.

One thing working in Express Scripts' favor is the rapidly growing number of older Americans. According to the U.S. Census Bureau, the elderly American population will nearly double to 83.7 million between 2012 and 2050. Older Americans are more likely to need medication, implying that PBMs, which serve as the middlemen between pharmacies and drugmakers, will stay quite busy for decades to come.

Another plus for Express Scripts is that it often locks in its customers for the long term. For instance, in 2011, Express Scripts and Walgreen Boots Alliance parted ways, costing Walgreens billions of dollars as customers migrated to its competitors. Walgreens came back to Express Scripts just a year later, signing a long-term deal with the PBM. Express Scripts is also currently embroiled in a suit with Anthem over drug pricing, but I'd suggest that, if Walgreens has set any precedent, then a deal will likely be made prior to the expiration of their agreement in 2019.

Valued at only 11 times forward earnings, and trading at a PEG of less than 0.8, Express Scripts could be just what the doctor ordered for value investors.

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Sean Williams has no material interest in any companies mentioned in this article. You can follow him on CAPS under the screen nameTMFUltraLong, and check him out on Twitter, where he goes by the handle@TMFUltraLong.

The Motley Fool owns shares of and recommends Express Scripts and Ford. It also recommends Anthem. Try any of our Foolish newsletter services free for 30 days . We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy .

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.


The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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