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BioScript (NASDAQ:BIOS) is looking like a bargain. The company is like a miniature Medco, but operates in the specialty PBM line.

At present, results are pretty lousy. We were supposed to see synergies when the company was formed through a merger of Chronimed and MIM in early 2005. Instead costs have risen, pinching profit. But the company is under focused new leadership and has already announced a $7.5 million cost cut program -- this for a company with a $97 million market cap at this point.

BIOS is the sole supplier for certain drugs under a Medicare program which was launched July 1. I have no idea what this is worth, but we'll know soon when they release results, expected in early November. Overall, the business is expected to post nice top line growth.

This is largely a cost cutting story. Top line growth is gravy. If the company can return to their historical average operating margin of around 2.6%, a stock price at an absolute minimum of $6 is easily attainable. Historically, their results have been somewhat volatile, owing largely to their smaller size.

Disclosure: I own shares of BIOS.

Source: BioScript: New Leadership Should Drive Growth