CVS Jun 2019 60.000 call

OPR - OPR Delayed Price. Currency in USD
0.0400
-0.0100 (-20.00%)
At close: 3:30PM EDT
Stock chart is not supported by your current browser
Previous Close0.0500
Open0.0800
Bid0.0300
Ask0.0500
Strike60.00
Expire Date2019-06-28
Day's Range0.0400 - 0.0800
Contract RangeN/A
Volume40
Open Interest936
  • Can CVS Stock Overcome the Latest Wrench in Its Aetna Merger?
    InvestorPlace3 days ago

    Can CVS Stock Overcome the Latest Wrench in Its Aetna Merger?

    Senior Judge Richard Leon sent shares in drug store chain CVS (NYSE:CVS) lower after saying he might try to stop its $69 billion merger with Aetna (NYSE:AET), a health insurer. CVS announced the deal in December 2017. Since then, CVS stock is down over 25%. It was due to open for trade June 12 at about $54 per share. CVS' market cap of $70 billion is now just 36% of its 2018 revenue, which was $194 billion.Source: Mike Mozart via FlickrLeon told CVS' and Aetna's lawyers to "cancel their summer vacation," arguing the Department of Justice barely considered what adding 21 million customers could do for CVS' Caremark, a Pharmacy Benefit Manager (PBM).Oral arguments will be held July 17, a ruling coming shortly after. CVS has already agreed to sell its Medicare Part D plan, the only overlap with Aetna, to Wellcare, which in turn is being bought by Centene (NYSE:CNC).InvestorPlace - Stock Market News, Stock Advice & Trading Tips The Question of CostsCentene's involvement begs the main question raised by the merger, which is whether the deal can cut healthcare costs.Centene's market advantage is cost visibility. Its business model is to profit in Medicare and Medicaid by owning clinics and other facilities its covered patients use. It was a big winner on the Obamacare exchanges, where it could offer much lower prices than standard insurance plans.The American Hospital Association opposes the CVS-Aetna merger, while supporting mergers between hospital groups, arguing that hospitals aren't the cause of health care inflation. * 10 Stocks That Every 30-Year-Old Should Buy and Hold Forever They're right. Drugs are. Combining PBMs and insurers is how the industry is fighting drug costs.CVS plans to turn 1,500 stores into "HealthHubs," after the merger, with labs, nurses and dieticians to treat chronic conditions like diabetes, representing 75% of America's health care bill.CVS has been preparing itself for a favorable outcome since February, when it reached the agreement with the Department of Justice Judge Leon is now reviewing. The Question of CompetitionLeon's objections are centered on Caremark, but that unit's problems were behind the merger in the first place.The PBM model was upended four years ago when UnitedHealth Group (NYSE:UNH), the largest private insurer, bought Catamaran, another PBM, for its own OptumRx unit.The deal made the stand-alone PBM market untenable. Since then, Express Scripts, the largest PBM, was acquired by Cigna (NYSE:CI), an Aetna rival. That merger, and the CVS-Aetna tie-up, followed failed attempts by Aetna to merge with Humana (NYSE:HUM) and by Cigna to merger with Anthem (NASDAQ:ANTM). Having failed at horizontal mergers because of their size (despite UnitedHealth being bigger than either combination), the second-tier players moved toward vertical mergers, hoping to compete through cost control.Thus, Leon seems intent on stopping a train that has already left the station. UnitedHealth, Centene and Cigna own PBMs, and he's going to stop CVS-Aetna because CVS owns one? The Bottom Line on CVS StockNot all mergers work. CVS' own acquisition of Omnicare, a long-term care provider, caused it take a $3.9 billion write-down in the second quarter of last year, and a net loss for all of 2018. * 7 U.S. Stocks to Buy With Limited Trade War Exposure But given how far insurers have gone along the road to matching income with outgo, the Aetna merger was looking like a winner. The delays have pushed CVS shares down enough to give its 50 cent per share dividend a yield of 3.82%, even though absent of write-offs, it covers that dividend with earnings two to three times over each year.The Leon delay looks like a good opportunity for income investors to grab a bargain.Dana Blankenhorn is a financial and technology journalist. He is the author of the mystery thriller, The Reluctant Detective Finds Her Family, available at the Amazon Kindle store. Write him at danablankenhorn@gmail.com or follow him on Twitter at @danablankenhorn. As of this writing, he did not hold a position in any of the aforementioned securities. More From InvestorPlace * 4 Top American Penny Pot Stocks (Buy Before June 21) * 7 High-Quality Cheap Stocks to Buy With $10 * 7 U.S. Stocks to Buy With Limited Trade War Exposure * 6 Growth Stocks That Could Be the Next Big Thing Compare Brokers The post Can CVS Stock Overcome the Latest Wrench in Its Aetna Merger? appeared first on InvestorPlace.

  • This National Grocery Chain Will Carry CBD in 17 States
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    This National Grocery Chain Will Carry CBD in 17 States

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  • Moody's4 days ago

    CVS Health -- Moody's announces completion of a periodic review of ratings of CVS Health

    Moody's Investors Service ("Moody's") has completed a periodic review of the ratings of CVS Health and other ratings that are associated with the same analytical unit. The review was conducted through a portfolio review in which Moody's reassessed the appropriateness of the ratings in the context of the relevant principal methodology(ies), recent developments, and a comparison of the financial and operating profile to similarly rated peers.

  • Barrons.com5 days ago

    The Dow Fell 14 Points Because Trade-War Worries and Rate-Cut Hopes Cancelled Each Other

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  • Barrons.com5 days ago

    CVS Bought Aetna Last Year. Now a Judge Is Sowing Doubts.

    It remains unclear whether Judge Richard Leon can or will unwind the entire deal, the settlement, or do nothing—or what an inevitable appeal would involve.

  • CVS Stock Remains Too Cheap to Ignore
    InvestorPlace5 days ago

    CVS Stock Remains Too Cheap to Ignore

    CVS (NYSE:CVS) stock been caught in a downtrend over the past four years as the retail pharmacy giant has struggled to grow in a stagnant yet exceptionally competitive consumer pharmacy market. The result is that, while the S&P 500 has rallied 40% since the summer of 2016, CVS Health stock has dropped more than 40% during that same stretch.Source: Mike Mozart via FlickrThe company's outlook at this point does justify some of the weakness of CVS stock. The company isn't growing very fast, nor has it grown very quickly for several years. A major threat from Amazon (NASDAQ:AMZN) is looming just around the corner, and there is reason to believe that Amazon will do to the consumer pharmacy space what it did to the retail space. That's not good news for CVS Health stock. Further, legislation could push drug prices lower, and that would put pressure on CVS' already depressed margins . The company's huge and growing debt load is worrisome. * 7 Dark Horse Stocks Winning the Race in 2019 So CVS is a low-growth, low-margin, heavily-indebted company that's facing some sizable operational risks. That's a bad combination, which explains the 40%-plus drop in CVS since the summer of 2016.InvestorPlace - Stock Market News, Stock Advice & Trading TipsBut, at current levels, CVS Health stock is simply too cheap to ignore. Its management is taking all the right steps to mitigate its competitive risks and boost its growth over the next few years. As the company's growth rebounds, CVS stock will likely rally tremendously from today's depressed base.All in all, the outlook of CVS should markedly improve over the next several years, and that, together wit the hugely discounted valuation of CVS Health stock, should spark a big rally by CVS. The Fundamentals Aren't GreatLet's start by understanding that there is a reason why CVS stock has dropped more than 40% over the past four years; the company's fundamentals have not been that great.CVS isn't growing rapidly, and hasn't done so for awhile. Its revenue growth could take a hit in the foreseeable future if Amazon launches a massive e-pharmacy business. CVS' margins are low and could drop if legislation pushes drug prices lower across the nation. The company also has nearly $100 billion in debt on its balance sheet, and while interest rates are stubbornly low, any increase in rates could greatly raise the company's expenses.In other words, CVS is a low-growth company that could turn into a zero-growth company.Furthermore, it has low margins that could drop to zero, and its heavy debt load makes it vulnerable to interest rate increases. Because of all that, CVS Health stock has dropped meaningfully over the past several years.But the weakness of CVS stock won't last much longer because its fundamentals should improve over the next few years, and they should start rebounding soon. The Fundamentals Will ImproveThe bull thesis on CVS is simple. Specifically, the bulls think the company's fundamentals will improve soon. Once they do get better, CVS Health stock, with its current, low valuation, will fly higher.CVS' fundamentals will improve largely because of its acquisition of Aetna and CVS' new plans to dive into local healthcare markets. These new plans center around the rollout of HealthHUB locations, which are essentially digital, personalized and convenient doctors' offices that will be located in CVS' stores.Management expects to open 1,500 HealthHUBs by 2021. These offices will enable CVS to benefit from new product and service opportunities for the company, including chronic care and disease management, home hemodialysis, healthcare analytics, and more. All those new product and service opportunities are expected to expand the company's addressable market, improve its customer retention and loyalty, enhance the shopping experience it provides, and strengthen its competitive advantage.The HealthHUB rollout is expected to drive high-quality revenue and profit growth over the next several years. Management is guiding for mid -single-digit profit growth into 2021, and low double-digit profit growth thereafter.CVS stock price doesn't reflect any of these positive catalysts. It trades at just eight times analysts' average forward earnings estimate. That's basically a decade low. The yield of CVS stock is up to 3.8%. That's basically a decade high.Ultimately, the combination of fundamental improvements and a discounted valuation will drive CVS materially higher from today's depressed levels. The Bottom Line on CVSThe fundamentals supporting CVS stock aren't great. But they will get better over the next few years. As they do get better, CVS stock should rally, because at the present moment, the stock is priced for death. CVS won't die. Instead, it will grow, meaning the potential gains by CVS over the next few years is quite compelling.As of this writing, Luke Lango was long AMZN. More From InvestorPlace * 4 Top American Penny Pot Stocks (Buy Before June 21) * 7 Dark Horse Stocks Winning the Race in 2019 * 6 Chinese Stocks to Sell That Are Suffering From a Digital Ad Slowdown * 4 Technology Stocks Blasting Higher Compare Brokers The post CVS Stock Remains Too Cheap to Ignore appeared first on InvestorPlace.

  • Barrons.com5 days ago

    CVS Stock Slips on Report That Judge Will Rule Against Aetna Merger

    Shares of CVS Health slid after a report that people close to the company believe a federal judge is preparing to rule against its already-completed $69 billion acquisition of the health insurance firm Aetna.

  • TheStreet.com5 days ago

    CVS Health's $69 Billion Acquisition Facing Potential Legal Block - Report

    Citing sources familiar with the proceedings, the Post reported that U.S. District Court Judge Richard Leon warned lawyers at a little-noticed hearing last week that they may want to cancel their summer vacation plans as he contemplates blocking the mega-merger on concerns it could raise prices and kill choices for consumers. A key issue for Judge Leon is whether the U.S. Department of Justice properly evaluated the potential impact of adding some 21 million Aetna customers to CVS's pharmacy-benefits management business, the Post said. "I think Leon rules against us," a source working with CVS and Aetna told the Post, speaking on condition of anonymity.

  • PR Newswire5 days ago

    CVS Health Introduces New Service to Help PBM Clients Manage Health and Wellness Benefit Solutions

    WOONSOCKET, R.I., June 11, 2019 /PRNewswire/ -- CVS Health (CVS) today announced the availability of Vendor Benefit Management, a new service developed to help CVS Caremark pharmacy benefit management (PBM) clients more easily contract, implement and manage their choice of available and emerging third-party health and wellness benefit solutions – both digital and non-digital. This new service offers clients a seamless way to access negotiated pricing, standardized member eligibility verification in real-time, simplified billing and payment processing, and standardized results measurement and reporting across multiple vendors. Big Health, a digital therapeutics company, is the first participating vendor, and Sleepio, its automated, personalized digital sleep improvement program, will be available to CVS Caremark clients via Vendor Benefit Management.

  • Markit5 days ago

    See what the IHS Markit Score report has to say about CVS Health Corp.

    CVS Health Corp NYSE:CVSView full report here! Summary * Perception of the company's creditworthiness is negative * Bearish sentiment is low * Economic output for the sector is expanding but at a slower rate Bearish sentimentShort interest | PositiveShort interest is extremely low for CVS with fewer than 1% of shares on loan. This could indicate that investors who seek to profit from falling equity prices are not currently targeting CVS. Money flowETF/Index ownership | NeutralETF activity is neutral. ETFs that hold CVS had net inflows of $4.60 billion over the last one-month. While these are not among the highest inflows of the last year, the rate of inflow is increasing. Economic sentimentPMI by IHS Markit | NegativeAccording to the latest IHS Markit Purchasing Managers' Index (PMI) data, output in the Healthcare sector is rising. The rate of growth is weak relative to the trend shown over the past year, however, and is easing. Credit worthinessCredit default swap | NegativeThe current level displays a negative indicator. Although CVS credit default swap spreads are decreasing, they remain near their highest levels of the last 3 years, which indicates the market's more negative perception of the company's credit worthiness.Please send all inquiries related to the report to score@ihsmarkit.com.Charts and report PDFs will only be available for 30 days after publishing.This document has been produced for information purposes only and is not to be relied upon or as construed as investment advice. To the fullest extent permitted by law, IHS Markit disclaims any responsibility or liability, whether in contract, tort (including, without limitation, negligence), equity or otherwise, for any loss or damage arising from any reliance on or the use of this material in any way. Please view the full legal disclaimer and methodology information on pages 2-3 of the full report.

  • Will HealthHUBs Help CVS Survive the Retail Apocalypse?
    Motley Fool5 days ago

    Will HealthHUBs Help CVS Survive the Retail Apocalypse?

    The pharmacy chain hopes the ability to get personalized health advice from in-store experts will bring more customers through its doors.

  • Financial Times5 days ago

    Digital health breakthrough as US insurers agree to pay for insomnia app

    Hundreds of thousands of Americans will be able to access an app to tackle sleeplessness after CVS Health, which administers health benefits for insurers and big employers, set up a way for the treatment to be paid for in the same way as a drug. On Tuesday, CVS said it was partnering with Big Health, a San Francisco-based company that has developed the Sleepio app to treat insomnia. The agreement means that employers or health plans will be able to add Sleepio to the list of solutions they reimburse, and check patients’ eligibility, using the same systems and processes used for drugs.

  • Here’s What Hedge Funds Think About CVS Health Corporation (CVS)
    Insider Monkey5 days ago

    Here’s What Hedge Funds Think About CVS Health Corporation (CVS)

    Is CVS Health Corporation (NYSE:CVS) a good bet right now? We like to analyze hedge fund sentiment before doing days of in-depth research. We do so because hedge funds and other elite investors have numerous Ivy League graduates, expert network advisers, and supply chain tipsters working or consulting for them. There is not a shortage […]

  • Benzinga6 days ago

    Kroger To Introduce CBD Products In 17 States

    Kroger Co (NYSE: KR ) is the latest company to introduce CBD products to its U.S. store shelves. The grocery chain's corporate affairs manager for its Michigan division, Rachel Hurst, said the company ...

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    Zacks6 days ago

    Is Deep Value ETF (DVP) a Strong ETF Right Now?

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  • GuruFocus.com8 days ago

    Stocks That Fell to 3-Year Lows in the Week of June 7

    Schlumberger Ltd., 3M Co., CVS Health Corp. and UBS Group AG have declined to their respective 3-year lows

  • Barrons.com8 days ago

    Salesforce Gets Buy From Canaccord

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  • InvestorPlace9 days ago

    7 Stocks to Buy As They Hit 52-Week Lows

    It's amazing what a couple of good trading days can do for a lousy stock market. When I thought about doing an article about stocks to buy hitting 52-week lows recently, a quick search of companies with a market cap of $2 billion or more revealed a total of 124 hitting 52-week lows.Fast forward three days later and there's only 22 stocks hitting 52-week lows according to Finviz.com.InvestorPlace - Stock Market News, Stock Advice & Trading TipsNow, I'm as game as the next person when it comes to picking possible stocks to buy, but given I'm attempting to choose one stock from seven different sectors, 22's not going to cut it. * 7 S&P 500 Dividend Stocks to Buy at Least Yielding 3% Therefore, to ensure I've got better options from as many sectors as possible, I've relaxed the qualifier to those companies trading within 5% of a stock's 52-week low. By doing so, I get a total of 120 stocks with a least one choice from eight different sectors, making the options a lot more palatable. Methanex (MEOH)As I write this, Methanex (NASDAQ:MEOH) is trading within seven cents of its 52-week low of $41.39, which is more than half its 52-week high of $83.23. Methanex is one of the world's largest producers of methanol which its customers to use to make everything from adhesives to windshield washer fluid. It also sells methanol to oil refiners who turn it into a high-octane fuel. Based in Vancouver, B.C., the company expects strong demand for methanol over the next four years with a growing piece of its business going to companies converting methanol to olefins which can then be turned into polyolefins, which are used to make all kinds of plastics. In late April, Raymond James analyst Steve Hansen suggested to clients that they consider Methanex stock because of its steep decline in price. Hansen's got an $80 price target and an outperform rating on it. "We continue to recommend that investors accumulate MEOH shares based upon our constructive view on improving methanol fundamentals, the company's robust associated free cash flow profile, and the stock's attractive valuation," Hansen stated.Trading at a level it hasn't seen since June 2017, if the economy holds, MEOH is a bargain. Wolverine World Wide (WWW) Source: Brubastos via Flickr (modified)Wolverine World Wide (NYSE:WWW) is trading within 38 cents of its 52-week low of $27.64, which is 31% below its 52-week high of $39.77. Wolverine, known for footwear brands such as Keds, Hush Puppies, Skechers, Sperry, and many more, is having a tough time dealing with tariffs on the Chinese shoes it imports. It recently asked the Trump government to reconsider increasing these tariffs as it would mean American households would be paying as much as a 100% duty on shoes imported from China. "While U.S. tariffs on all consumer goods average just 1.9 percent, they average 11.3 percent for footwear and reach rates as high as 67.5 percent. Adding a 25 percent tax increase on top of these tariffs would mean some working American families could pay a nearly 100 percent duty on their shoes," the letter stated. * 5 Healthcare Stocks to Pick Up From the Wreckage While the near term doesn't look good for the Michigan company, it still anticipates revenue growth in the low-to-mid-single digits in 2019. Despite all the tariff troubles, it estimates adjusted earnings per share will be at least $2.20, which means it is currently trading at less than 13 times its forward earnings. By comparison, Nike (NYSE:NKE) trades at almost 27 times its forward earnings. Simon Property Group (SPG)Source: m01229 via Flickr (Modified)Simon Property Group (NYSE:SPG) is trading within 2% of its 52-week low of $159.69, which is 17% below its 52-week high of $191.41.Recently, a group by the name of Peer & Peri LLC made a mini-tender offer to purchase up to 20,000 of the mall owner's shares at a 21% discount to the $178.11 share price at the commencement of the offer on May 6. Down 8% since the offer was disclosed, it expired on June 6 at 5 p.m. Although Simon put out a statement recommending shareholders reject the below-market mini-tender offer, these things are intended to catch investors off guard, prompting them to mistakenly sell their shares at a discount. If you Google "Peer & Peri LLC," you will see that it happens to a lot of reputable companies. I'm not sure why it's allowed to happen, but it is. Forbes contributor Sanford Stein, who's spent four decades studying retail, recently made a great observation about Simon."David Simon knows this stuff. That's why he is CEO of the largest mall developer in the country, with over 200 of the best remaining malls. It's also quite likely that when the 1,300 or so malls that exist today are reduced to 500 or 600, in say the next decade, Simon Property Group will still own and manage the best ones," Stein wrote May 14. I like the idea of getting SPG stock at $140 a share, but I wouldn't recommend you try to do it the Peer & Peri LLC way. CVS Health (CVS)Source: Mike Mozart via FlickrCVS Health (NYSE:CVS) is trading within 5% of its 52-week low of $51.72, which is 37% below its 52-week high of $82.15. CVS held its annual investor day June 4; a day in which CEO Larry Merlo spent most of his time assuring shareholders that its acquisition of Aetna would pay dividends in the long run despite the apparent near-term difficulties. Merlo sees the company generating double-digit sales growth in 2022 once the $70-billion purchase is fully integrated. CVS is building a vertically integrated health business that provides everything from insurance, prescription drug benefits, healthcare services, and retail drugstores. It expects to find at least $300 million in synergies in 2019 and $800 million in 2020. "Keep in mind we're in the early innings of our transformational journey," Merlo told investors. "This will be a multi-year journey with benefits building over time as we continue to build and refine new programs to better serve the needs of our stakeholders."I'm normally not a fan of large acquisitions, but given how incredibly dysfunctional the U.S. healthcare sector is, anything that reduces the cost while maintaining profitability, is bound to do well in the long run. * 7 Stocks to Buy That Don't Care About Tariffs Take advantage of the uncertainty to get a well-run company at a very reasonable price. Pentair (PNR)Source: HereStanding via Flickr (Modified)Pentair (NYSE:PNR) is trading within 3% of its 52-week low of $34.72, which is 25% below its 52-week high of $46.00.Pentair became a pure-play water company in April 2018 when it spun-off nVent Electric (NYSE:NVT), its electrical connection and solution company. As a result, Pentair now has three water-related businesses only: aquatic systems, filtration solutions, and flow technologies. Given the importance of water in our world, the hiving off of its electrical business allows Pentair to focus entirely on water technology.Although the company's first-quarter core revenues were down 4% over the same time last year and its adjusted earnings per share fell 12%, it still expects to report adjusted EPS of at least $2.30 in 2019, which means it's currently trading at less than 11 times its 2019 earnings. Furthermore, with three operating segments generating almost identical revenues, it's got downside protection built right into its business model. Should a recession come to pass, it won't be overly reliant on a single segment for sales. It's not a sexy business, but it's got an excellent 2.9% dividend yield to get paid until its growth initiatives take hold. Urban Outfitters (URBN)Source: Shutterstock Urban Outfitters (NASDAQ:URBN) is trading within 4% of its 52-week low of $22.19, which is 58% below its 52-week high of $52.50.Urban Outfitters has several issues that have brought its stock to its news in the past year. They include deteriorating business trends, difficult same-store sales comparisons, product issues at its Urban Outfitters brand, including a slowdown in women's apparel, and finally, a serious concern about tariffs on Chinese imports. That said, it continues to be one of the most financially sound retailers that's publicly traded. It finished the first quarter (April 30 quarter end) with no debt, $520 million in cash, and $447 million in free cash flow. Free cash flow yield is one of the metrics I use for non-financials to evaluate the relative value of a stock. In the case of URBN, it has an FCF yield of 23% based on an enterprise value of $1.94 billion. * 7 S&P 500 Dividend Stocks to Buy at Least Yielding 3% As long as it continues to deliver positive same-store sales growth, $23 ought to appear very cheap to investors. Citrix (CTXS)Source: Shutterstock Citrix Systems (NASDAQ:CTXS) is trading within 3% of its 52-week low of $93.12, which is 20% below its 52-week high of $116.82.Citrix, known for its on-premise software for making companies more productive, is moving to the cloud and subscription-based software offerings. The transformation is aimed at creating a platform that provides large enterprises with a hybrid cloud that can grow and adapt based on their needs. Change is always tricky, and while the transformation is expected to take several years, CEO David Henshall insists that it's the right thing to do for customers, employees, and shareholders. Citrix's Intelligent Workspace is a platform for company applications that operate intelligently to improve productivity. The company's goal is to provide enough productivity improvements through its platform to give users back one day of their work week lost to moving between applications. If you look at its revenues for the first quarter ended March 31, you'll see that Citrix's subscription revenues increased by 37% over a year earlier accounting for 19.7% of its overall revenue, 490 basis points higher than a year earlier. As it invests in research and development for the Intelligent Workspace, its subscription revenues will continue to grow at a double-digit pace. Down from its all-time high of $116.82, if it drops below $90, you're getting a terrific deal. At the time of this writing Will Ashworth did not hold a position in any of the aforementioned securities. More From InvestorPlace * 4 Top American Penny Pot Stocks (Buy Before June 21) * 7 S&P 500 Dividend Stocks to Buy at Least Yielding 3% * 7 Stocks to Buy That Don't Care About Tariffs * 5 Healthcare Stocks to Pick Up From the Wreckage Compare Brokers The post 7 Stocks to Buy As They Hit 52-Week Lows appeared first on InvestorPlace.

  • Do Hemp Stocks Stand to Gain From a Weed-Liberal Illinois?
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    Do Hemp Stocks Stand to Gain From a Weed-Liberal Illinois?

    The marijuana legislation in Illinois would allow any resident of the state above the age of 21 to possess the novelty item.

  • Billed as a health product, CBD faces stiff test from skeptical regulators
    Yahoo Finance10 days ago

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  • The Geo Group, Vista Outdoor, CVS and Walgreens Boots Alliance highlighted as Zacks Bull and Bear of the Day
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    The Geo Group, Vista Outdoor, CVS and Walgreens Boots Alliance highlighted as Zacks Bull and Bear of the Day

  • 3 Reasons Why Patience On CVS Health Stock Could Pay Off For Investors
    InvestorPlace10 days ago

    3 Reasons Why Patience On CVS Health Stock Could Pay Off For Investors

    In the second half of April, I wrote about the waning sentiment toward CVS Health (NYSE:CVS). On the surface, CVS stock has the necessary components to move higher. Obviously, the company is in the business of health care, which is typically not an optional endeavor for people. Second, CVS offers diverse coverage in this segment with its pharmacy benefit manager business.Source: Mike Mozart via FlickrAt the same time, CVS Health stock has components that don't favor a higher market value. One of those anchors is debt. At nearly $68 billion from its last quarterly report, that's a hefty load. Plus, health care represents a lucrative sector for companies desperate to expand beyond their boundaries. While I wouldn't characterize Amazon (NASDAQ:AMZN) as desperate, Jeff Bezos and friends are certainly willing to disrupt this segment.As a result, CVS stock has a credibility dilemma that the markets don't feel the underlying organization has effectively addressed. While I adopted the cautiously optimistic approach to the retail-pharmacy giant, shares have moved like I reasonably expected. This is a name that will require a strong stomach and significant patience, as at yesterday's $53.17 close, the shares are less than 3% off the low-end of their 52-week range.InvestorPlace - Stock Market News, Stock Advice & Trading Tips * 6 Big Dividend Stocks to Buy as Yields Plunge But if that's you, I think CVS Health stock provides an interesting platform. Here are three reasons why: Automation Can't Touch CVS StockFor many folks, especially in the rust belt of America, automation is a scary word. In fact, it's the central catalyst that has sparked political firebrand Andrew Yang's presidential campaign. Consistently, Yang argues that we're in the midst of a fourth industrial revolution that will displace millions of workers.Furthermore, the Democratic candidate points the finger at Amazon. While the e-commerce giant is the internet age's flagship success story, it also disrupted small businesses throughout the country. The fear is that CVS stock, as part of the broader retail-investment landscape, will face automation at some point.I don't think that will happen. I'll go out on a limb and say that it will never happen. This forecast bodes well for CVS Health stock, if I'm right.Let me hedge that by saying this: automation will certainly replace or substantially modify health care's administrative components. I'm not breaking new ground with this statement because it's already happening.But the medical and pharmaceutical industries involve variances. We still don't know much about the human body and its reaction to outside stimuli. That's obvious when you consider the raging opioid crisis.More critically, humans can make executive decisions that save lives. Perhaps a patient's allergy history makes a particular drug unsafe, or an obviously pregnant patient may have complications from an apparently mistaken prescription: artificial intelligence is so far unable to make such dynamic decisions. However, they're a routine part of the current pharmacy life. Politics Offer a Tailwind for CVS Health StockLike most Americans, I'm incredibly confused about the healthcare system. As a contrarian, I consider that a blessing. I really don't want to be an expert on this subject because it probably means I'm not doing too well.That said, what I do know about health care in America is that it's outrageously expensive. Becoming a medical doctor used to be a noble profession. Now, it merely seems like a pathway to riches. I love what Yang has to say about this topic: we spend the most on healthcare yet receive the worst results.You don't have to pull up wonky charts and graphs to understand the problem. As I mentioned in my last article about CVS stock, hundreds of thousands of Americans travel to Mexico each year to receive significant discounts on prescription drugs.That right there proves we have a disconnect in the system: how can patients who are only separated by arbitrary borders pay radically different drug prices? Clearly, the drugs themselves aren't that expensive to produce. Instead, we have bloated bureaucracies that have exponentially skyrocketed healthcare costs to untenable levels for many families.Fortunately, it appears Washington finally has the political will to address this escalating crisis. In the long run, I see this dynamic as a net positive for CVS stock. Theoretically, the pharmacy will gain business that's currently going off the books to Mexico. Additionally, millions of patients will have access to reasonable healthcare costs, eliminating the incentive to skimp on medication. CVS Offers a Trusted Brand NameApparently, it's in vogue to go bearish on CVS Health stock and similar names like Walgreens Boots Alliance (NASDAQ:WBA). With disruptive competitors lurking in the shadows, there doesn't seem to be much room in this segment. * The 10 Best Stocks for 2019 -- So Far But as much as I like Amazon and its ilk, I'm not sure if they can disrupt health care like they have other industries. The biggest difference I see is that health care is obviously intimate and personal. As such, people will not always make economically rational decisions here.For instance, if you're in the market for LASIK eye surgery, price isn't the deciding factor. Instead, it's skill and a very long track record of success. Your vision is an attribute that is truly priceless. You're not going to trust your eyes to a doctor with a degree from Trump University.In the same framework, CVS ranks as one of Fortune's "World's Most Admired Companies." I'm not surprised. Whenever I have medicinal needs, I run to CVS, as do millions of others. They know what they're doing. The company also hires many of the best medical professionals.Amazon? I like them for purchasing books, clothes, and electronic devices. But I'll pass on their drugs. As long as overall costs are reasonable, the track record for CVS stands above the rest.As of this writing, Josh Enomoto did not hold a position in any of the aforementioned securities. More From InvestorPlace * 4 Top American Penny Pot Stocks (Buy Before June 21) * 7 Stocks to Sell Impacted by the Mexican Tariffs * 6 Big Dividend Stocks to Buy as Yields Plunge * The 10 Biggest Announcements From Apple WWDC 2019 Compare Brokers The post 3 Reasons Why Patience On CVS Health Stock Could Pay Off For Investors appeared first on InvestorPlace.

  • Benzinga11 days ago

    CVS Turnaround Plan May Be 'Good Enough,' But Timeline Is The Question

    CVS announced ahead of its investor day on Tuesday that it will open 1,500 HealthHUB stores by the end of 2021. CVS says it will follow the Houston test market for HealthHUB with three more markets this year. CVS’s performance improvement plan presented to analysts includes $900 million in synergies at newly acquired Aetna by 2021, and more than $1.5 billion in savings from modernization by 2022.