Catamaran Corp (CCT.TO)

(Market Call Minute) Valuations are stretched. Way over valued.

A pharmacy benefits manager. Basically manages your drug benefit electronically. Obama care in the US, despite its rocky start, will expand coverage, which means there will be more people who need their pharmacy benefit managed and he thinks this company will benefit from that. Had a big run, but has pulled back into a range where he feels they can be bought.

Pharmacy benefits business. Taking market share. One of his smaller holdings but has held it for a long time. Had a huge run over the last 5 years but is now just going through some digestion. In a trading range over the next year or so.

Obama care is having an effect on this. This company is well-positioned to go into this automated system. The roll out of the plan could cause some hiccups in the next quarter or 2, which has put the stock under some pressure. Might be a little volatile over the next couple of quarters but long-term, these guys are beautifully positioned for the growth of that industry. He might add more to his holdings on weakness.

(Market Call Minute.) Would be little bit careful with this. It is extremely volatile.

Been under pressure - undue concern about health care in the states. If that happens he thinks this one will do better and recommends taking advantage of this move. Just won the sigma contract. Down around 16 times earnings and thinks they will be taken out at some point. Lower highs and lower lows but he goes on fundamentals.

(A Top Pick June 4/12. Up 31.99%.) Did a 2-for-1 split in Oct/12. Still has very good upside potential. Based on the extremely high recurring revenue, as they get bigger, they are able to buy more drugs at cheaper prices and pass on those savings to customers. Doesn’t own as he thinks there are multiple opportunities in smaller companies, to really go up but it’s not to downplay these Top Picks.

Had a huge, huge move. Very successful but it has grown largely through acquisitions. Any time we have seen companies grow aggressively through acquisitions and are trading at very high valuation multiples, they are typically not ones he would like to own. Usually the acquirers have a misstep on an acquisition. Feels this is priced to perfection.

(Market Call Minute.) Trades at a very steep valuation. Has been a great success story but very expensive.

Doesn’t follow it closely but saw them present at a recent conference. Have done a very good job of making acquisitions in the US. Earnings have been growing very rapidly, but mainly through acquisitions. Multiple is fairly high and he prefers growth at a reasonable price. Might be a little ahead of itself.

Down about 15% or so from its recent high. Healthcare spending in the US could be on a cutting block. This is a company that the US government, any municipality, any state or province should want to help bring down costs.

Used to be called Systems Excellence. Health care sector. Get a few cents for every script written by pharmacy customers. Valuation relatively high due to piers. Growth only through acquisitions and not organic, which he would like to see. Thinks weighting in TSX will increase and indexes will have to increase holdings in short term.

(Market Call Minute.) Brilliant company.