CVS could care less if they sold one more sheet of construction paper. It's all about selling prescriptions, that's where they make 90% of their money. If they were so driven to sell construction paper and other low margin junk why did they abandon cigarettes? The stock may be a tad high but this is a cash machine with a very defensible franchise. To call it a fraud is a joke, there aren't many companies that are under more regulatory scrutiny than this one.
This stock is about 90% institutionally owned. Idiots who buy over price per share are the same ones who ended up owning Grand Union and A&P and Blockbuster because they liked the stores and the stock was cheap because it was $3.. Everyone has access to a calculator and should be able to multiply, divide,add and subtract to figure out if this is a buy or a sell. The stock price by itself is irrelevant.
Cigarettes are the most overblown and misunderstood part of the CVS story. Empty revenues are a worthless pursuit, which is what cigs are. No margin. Pay more attention to what they're doing in Caremark, Minute Clinic, specialty pharma and other heathcare add-ons they're doing. The stock has gotten ahead of itself but in two years no one is going to talk about cigarettes. WAG and RAD will look like convienence stores with a pharmacy attached. Selling soda and potato chips is a loser business and so is selling cigarettes. Being a healthcare leader is going to win Caremark a ton of business (that's where the money is) as they turn the PBM business into a truly differentiated proposition instead of a price only one.
You missed my point. Forget about the split, if the stock price declined to $65/sh the dividend yield would be around 2.1%. I was just pointing out that they have a dividend policy that results in a $1.40 payout and that payout is divided by the price to get the yield. The higher the price the lower the calculated yield. So I'd trade price growth for dividend yield.
Keep in mind that the same $1.40 div would be a 2.8% yield on a $50/sh stock, unfortunately it's only a 1.5% yield on a $94 stock. Also keep in mind that they have $12.5b approved for stock buybacks(almost 12% of market cap) which is also returning cash to shareholders and is not taxable.
Clone if you bought 1000 shares of WAG that day and shorted 1000 CVS you'd be down $6000. The spread has gone from $15 to $21. Your portfolio must look like wartime Bosnia
If you think this is a low p/e you must be living in the lost city of atlantis because while there is still a nominal "P" there is no "e". the projected cash flow they have been promising was supposed to kick in from all these marketing arrangements a year ago(and hasn't) "but" they're still working them out. you can hope those deals work out but you know they pay interest everyday on that debt . this stock is an option by itself, no reason to pay option premiums on short term plays as there will be no numbers until march '15.
No way. Caremark is part of CVS and they may have the federal insurance contract for prescriptions but they can't steer people to CVS retail. You may be limited to using CVS/Caremark for mail order though.
dopey people like clone can't use tax write-offs unless they have gains. he'll pass away with all those accumulated losses.
lucky day, clones tin cup got enough dimes tossed in, he has internet access back!
Well it is pretty #$%$ apparent that they use "fuzzy accounting". They say GAAP doesn't accurately reflect their business. There's no catalyst for this stock, they won't have a loss/"earnings" report for several months. They cancelled the investor call to explain how their "QMA's" work and only booked $5mm of the $50mm they said was in the bag for 2014 with most of that supposedly coming in 3q. New plan is to grow earnings through headcount reduction, always a sign of a good growth company (not).
read the conference call transcript, excuse after excuse. not one paragraph without an excuse. we spent money and think we will make money some day...we thought we had $59mm in ebitda from QMA's, but we only booked $5mm but we hope that's going to come next year. the cash flow doesn't come and the debt doesn't go away
I don't know about "oversold reaction", I think you have a lot of tired investors. This stock IPO'd a year ago ($13)based on a set of projections that are unrecognizable in any form today.So the $260mm they took in in Oct.2013 is now worth about $80mm and the net debt has increased by about $225mm. Maybe it will be a good "bounce play" but I think it's a blind spec.
by the next earnings report pro-forma adjusted ebitda will be = to revenues, they will just keep excluding more and more categories of expenses
So shop at the grocery store. I'm sure the stock clerk went right to the CEO with your insight. They don't make a lot of money in the front of the store, it's all in pharmacy. The front of the store will never be the reason to go to a CVS.