Pursuing A Pinchpenny?

CompScript (CPRX) is a fast-growing provider of pharmacy-management services whose stock, now at 5 a share, has yet to catch the eye of the Street. But the biggies--health-maintenance organizations, insurers, and drugmakers--have noticed CompScript: Four such companies, says an investor close to the company, have made overtures.

"What they're after is CompScript's proprietary systems to cut health-care costs," says Kemp Fuller of L.T. Lawrence, a New York investment firm. "Using an integrated computer system, CompScript offers savings to insurers, employers, and patients." He's impressed with the company's fast growth, mainly through acquisitions. It provides services traditionally associated with a pharmacy. In addition, it reviews drug utilization and provides nursing services, worker's-compensation drug programs, accounting, and other consulting services.

CEO Brian Kahan admits informal overtures have been made but says: "There hasn't been anything that was attractive enough." He thinks the company will be in the $100 million category in sales in several years.

Fuller agrees. He figures sales will jump from $20 million this year to $50 million next year. Fuller thinks CompScript will make 15 cents a share this year and 40 cents in 1997. The stock is way undervalued, he says. He notes that CompScript's price-earnings ratio is below the 1997 industry average of 26. Based on projections of 40 cents, the stock is trading at 12.5. Fuller thinks the stock will hit 12 in 12 to 18 months.

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