Sell Catamaran (CTRX) Ahead of HealthSpring Contract Update - Cramer
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Price: $61.47 --0%
Rating Summary:
4 Buy, 18 Hold, 0 Sell
Rating Trend: = Flat
Today's Overall Ratings:
Up: 0 | Down: 0 | New: 0
Rating Summary:
4 Buy, 18 Hold, 0 Sell
Rating Trend: = Flat
Today's Overall Ratings:
Up: 0 | Down: 0 | New: 0
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Catamaran (Nasdaq: CTRX) is lower in early trading as stock guru Jim Cramer voiced a little concern on Tuesday night.
Cramer said that Catamaran, formerly SXC Health Solutions Corp, is still a great story. It has the scale and capacity to compete with companies like Express Scripts (Nasdaq: ESRX). Another potential benefit for the company will be an incoming wave of patented drug expirations.
However, Cramer noted that one of Catamaran's largest customers is HealthSpring (NYSE: HS), which accounts for about 10 percent of earnings. HealthSpring, which has a contract with Catamaran through 2014, was recently acquired by CIGNA (NYSE: CI). An update on that contract is expected in January and the outcome isn't known, though Cramer thinks its unlikely to be renewed.
Cramer is still positive on the stock, saying Catamaran will replace the lost earnings in a few weeks. However, there will be some near-term pressure as analysts begin adjusting numbers to account for the shift and Cramer suggests that investors exit before any of that news hits.
Shares are down 1.5 percent Wednesday morning.
Cramer said that Catamaran, formerly SXC Health Solutions Corp, is still a great story. It has the scale and capacity to compete with companies like Express Scripts (Nasdaq: ESRX). Another potential benefit for the company will be an incoming wave of patented drug expirations.
However, Cramer noted that one of Catamaran's largest customers is HealthSpring (NYSE: HS), which accounts for about 10 percent of earnings. HealthSpring, which has a contract with Catamaran through 2014, was recently acquired by CIGNA (NYSE: CI). An update on that contract is expected in January and the outcome isn't known, though Cramer thinks its unlikely to be renewed.
Cramer is still positive on the stock, saying Catamaran will replace the lost earnings in a few weeks. However, there will be some near-term pressure as analysts begin adjusting numbers to account for the shift and Cramer suggests that investors exit before any of that news hits.
Shares are down 1.5 percent Wednesday morning.
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