When you are trading stocks online, you could be looking for stocks that provide great value – stocks that are currently priced pretty low but nevertheless have significant opportunities for further growth.

The healthcare sector has a great value stock that is currently valued at a significantly discounted price. There are many reasons for that, though investor fear is largely unwarranted. The stock is certainly worth considering.

Why Is Express Scripts Priced Low?

Express Scripts ($ESRX) is a pharmacy benefit manager (PBM). If you haven't heard of PBMs, they are companies performing the task of negotiating prices of drugs between drug manufacturers and insurance companies. Through the 12 trailing months, shares of Express Scripts have fallen by close to 5%, which marked an underperformance of 20% to the S&P 500 during the same period. So why did that happen?

One of the major reasons is the contract dispute between the company and Anthem, a national health insurer. With both the companies having sued each other, the fear is that $ESRX could lose its Anthem contract. Another concern is the possibility of President Trump introducing a bill for prescription drug reform which could significantly compromise the efficiency of PBMs such as Express Scripts by reducing their negotiating power.

Are the Concerns Justifiable?

These concerns, however, don't justify a 20% underperformance. With Express Scripts being among the largest PBMs in the US, insurers will continue to seek its services irrespective of the Anthem dispute. With the ageing US population, prescription drug consumption will increase too. These drugs are getting more and more expensive, so insurers will have to depend more on companies such as $ESRX.

As for Trump's reforms, Republicans believe in an economy characterized by a free market which indicates that his prescription drug reform will not be as radical as feared. Besides, there are plenty of other agendas occupying his attention such as the infrastructure spending bill and tax reforms.

Express Scripts has a current value less than 10 times its earnings per share this year, with a PEG of around 1.

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