- My thesis was that ESRX would grow its profits. In the last quarter it did not. Something is wrong and I don’t understand what it is.
- I goofed because I don’t understand the implications of Obamacare as well as I should. I can’t figure out where the macro environment for Express Scripts is headed.
- I don’t like how Express Scripts’ integration costs have supposedly gone up. It seems like they may be trying to manipulate their adjusted earnings. I really dislike that type of behaviour. Honest managers tend to be better at running businesses. Managers may fail to correct mistakes if they do not want to recognize that they made them in the first place.
In general, I know I’ve been much better at identifying bad stocks than good stocks. I definitely have room for improvement on the long side.
*Disclosure: I sold all of my ESRX calls.
When I wrote about ESRX on August 1, 2013 the stock closed at $65.56. It is currently trading at around $67.32 (+2.7%), underperforming the NASDAQ, S&P 500, and other indices. I happen to have made an overall profit on my calls because I sold ESRX shares in January when my Jan 2014 calls expired.