A couple of days after we added Cardinal Health (CAH) to our portfolio two weeks ago, the company announced it had entered into an agreement with Navidea Biopharmaceuticals to market its radioactive cancer diagnostic product throughout North America.

The two companies had already been working together, splitting sales proceeds 50/50 under the prior agreement. But now Cardinal gets to keep 100% of the sales revenue, albeit at a cost of $100 million. This deal, though, could turn out to be hugely profitable for Cardinal because the cost of acquiring exclusive rights to this product should be considerably less than sharing half of all future sales revenue during the term of the contract.

It will be a while before anyone knows how that deal turns out, but in the meantime CAH looks cheap at less than 12 times forward earnings. Combined with its strong return-on-total-capital ratio of 49%, CAH ranks 53^rd out of more than 6,000 stocks trading on U.S. stock exchanges evaluated by our Rapid Profits Matrix.