|Bid||53.21 x 1200|
|Ask||53.23 x 800|
|Day's Range||52.89 - 53.36|
|52 Week Range||51.72 - 82.15|
|Beta (3Y Monthly)||1.09|
|PE Ratio (TTM)||N/A|
|Earnings Date||Aug 6, 2019 - Aug 12, 2019|
|Forward Dividend & Yield||2.00 (3.76%)|
|1y Target Est||68.65|
WOONSOCKET, R.I., June 24, 2019 /PRNewswire/ -- CVS Pharmacy, the retail division of CVS Health (CVS), announced today that it has completed the rollout of time delay safes in all of its 318 CVS Pharmacy locations in Michigan, including pharmacies located in Target stores. The safes are anticipated to help prevent pharmacy robberies and the diversion of controlled substance narcotic medications by keeping them out of the hands of unauthorized individuals.
President Donald Trump will sign an executive order aimed at requiring hospitals to be more transparent about prices before charging patients for healthcare services, Secretary of Health and Human Services Alex Azar said on Monday. The executive order will direct HHS to issue a rule that will mandate hospitals to disclose in an "easy-to-read, patient-friendly format" what prices patients and insurers will actually end up paying, Azar said. The order will ultimately require healthcare providers and insurers to provide patients with information about the out-of-pocket costs they'll face before they receive healthcare services, he said.
(Bloomberg Opinion) -- There were 755,436 people working in financial activities in the New York metropolitan area last year, more than twice as many as in the next-biggest area for such jobs, metro Los Angeles. But this amounted to just 8% of New York-area jobs. There are other metropolitan areas where finance makes up a much larger share of employment than that.What the location quotient numbers in the above chart mean, basically, is that in Bloomington, you’re almost four times as likely to encounter people who work in finance as in the country as a whole, and more than 2 1/2 times as likely to encounter them as in the nation’s financial capital. Which makes sense, given that the small Illinois city (2018 metro area population: 188,597) is the home base of insurance giant State Farm; Country Financial, another large insurance and financial group, is also headquartered there. A whopping 22% of the area’s jobs are in financial activities (nationwide, the percentage is 5.6%).Related: Where Microbrewery Jobs Are OverflowingBig insurers explain a lot about these rankings: There’s Principal Financial Group Inc. in Des Moines (along with 80 other insurance and financial services companies); the Hartford Financial Services Group Inc., Cigna Corp. and Aetna (since late last year a subsidiary of CVS Health Corp.) in and around Hartford; Mutual of Omaha in Omaha; USAA in San Antonio. In Sioux Falls, the specialty is credit cards — Citibank famously moved its card operations to the city in 1981 to take advantage of new South Dakota laws that allowed it to charge higher interest rates, and both Citibank and Wells Fargo are now officially based there (their parent companies, Citigroup Inc. and Wells Fargo & Co., are not). The Phoenix, Jacksonville, Omaha, Tampa, San Antonio, Salt Lake City and Dallas areas also all house big financial-services back-office operations. Bridgeport-Stamford-Norwalk — aka Fairfield County, Connecticut — has insurance and investment banking but also a lot of hedge funds, which helps explain why it has the nation’s highest financial-sector average annual wage, at $244,083.Just to round things out, Dubuque has the headquarters of Heartland Financial USA Inc., which owns community banks in 12 states; a Prudential Retirement call center; and a couple of local financial institutions. Birmingham is home to two sizable regional banks, Regions Financial Corp. and Banco Bilbao Vizcaya Argentaria SA subsidiary BBVA Compass. Oh, and New York has some financial institutions, too.Financial activities as defined by the Bureau of Labor Statistics include real estate and rental and leasing, which doesn’t entirely square with what most of us think of as finance. But when I narrowed things down to finance and insurance, Des Moines and Sioux Falls disappeared from the statistics, as the BLS often suppresses local data “to protect the identity, or identifiable information, of cooperating employers.” And I hated the idea of leaving out Des Moines and Sioux Falls, as anyone would.Still, it’s worth redoing the above exercise with a couple of narrower categories that accord better with the notion of high finance. Here are the 10 metropolitan areas with the highest employment location quotients for investment banking and securities dealing:OK, Durham-Chapel Hill was a bit of a surprise at the top of this list; the main explanation seems to be that Credit Suisse Group NA’s Raleigh campus, the firm’s second-largest office in the Americas, is not in Raleigh but in nearby Durham County. Still, the location quotients for metro New York and neighboring Fairfield County stand out, too, and in absolute terms there are seven times as many investment banking jobs in the New York area as in No. 2 metro Chicago. In other words, the commanding heights of investment banking in the U.S. are mostly where everybody thinks they are — although the pay is highest in the San Francisco area, where the investment bankers who take tech companies public tend to work.Finally, here’s the top 10 for portfolio management:It’s obviously no shock to see Bridgeport-Stamford-Norwalk in the top spot, although that location quotient really is something. Santa Fe, the U.S. metropolitan area with the most-altitudinous central city, at 7,199 feet (2,194 meters), is a little less obvious. The most famous hedge fund in town (Prediction Company, started in 1991 by a couple of physicists affiliated with the Santa Fe Institute) shut down last year, but a number of other money managers and private equity funds are located there, presumably because their founders like mountain air and art. The Virginia college town of Charlottesville exerts a similar if damper appeal; my Bloomberg Opinion colleague Joe Nocera wrote about the doings of a hedge fund kingpin there in March.There’s a clear wage divide on this list between places where money managers cluster, driving average pay above $300,000 a year, and those where the great majority of jobs are in administration, customer service and the like, such as metro Philadelphia, home to the largest mutual fund complex, Vanguard Group Inc. The Terre Haute metropolitan area clearly fits in the latter category, although it’s not clear where those 147 portfolio management employees work. Terre Haute-based First Financial Corp. is the area’s biggest financial services employer by far, but it’s chiefly a banking company.The point here, other than just taking advantage of the fun data that the BLS releases every three months from the Quarterly Census of Employment and Wages, is that while the standard picture of a U.S. financial sector concentrated in and around New York isn’t all wrong, there are other places around the U.S. that depend even more on financial services jobs to pay the bills.Coming Sunday: A booming local health-care industry isn’t always a good thing.To contact the author of this story: Justin Fox at email@example.comTo contact the editor responsible for this story: Brooke Sample at firstname.lastname@example.orgThis column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.Justin Fox is a Bloomberg Opinion columnist covering business. He was the editorial director of Harvard Business Review and wrote for Time, Fortune and American Banker. He is the author of “The Myth of the Rational Market.”For more articles like this, please visit us at bloomberg.com/opinion©2019 Bloomberg L.P.
Amazon’s (AMZN) efforts to crack the more than $600 billion prescription drug market in the US has suffered a blow, albeit a mild one. A federal judge in Rhode Island ruled on June 18 that a former executive at pharmacy chain CVS Health (CVS) couldn't work for Amazon’s pharmacy business, PillPack.
Amazon may have blown up the book business and much of Main Street, but the pharmacy benefit managers cloistered inside insurance giants have nothing to fear from the smiling brown box, according to a new report.
Are traditional retail pharmacies and insurance companies worried about Amazon.com, Inc. (NASDAQ: AMZN )'s push into their respective territories? Public comments from management teams brush off any concerns, ...
Management has a fine long-term record of value creation. At 2009's exact low CVS traded for 9-times that year's final earnings per share, while paying a 1.31% yield. Earnings per share never reached higher than $5.84 during that entire three-year period.
About five years ago, I realized that everywhere I went, there was a CVS Health Corp (NYSE:CVS). Cities, suburbs, uptown, downtown -- it didn't matter. No matter where I went, there seemed to always be a CVS right around the corner. I felt like Bill Murray in Groundhog Day.Source: Mike Mozart via FlickrI'm exaggerating but you get the point. I remember thinking that there were just too many CVS stores and that one day the market would become saturated and cannibalized.At some point, CVS stock and its ill-conceived lot would go the way of Sears and the Dodo bird.InvestorPlace - Stock Market News, Stock Advice & Trading TipsI don't typically follow CVS stock on a research basis and I hadn't looked at in a while, but when I was taking my dog Clifford to the veterinarian today (don't worry, it was just for his checkup; he is fine) I saw that they are building yet another CVS in my town. This is literally the seventh one that is within a five-mile radius of my house!Don't get me wrong. I like CVS and I go there all the time. I get ink for my printer there because it's closer than the local Staples (NASDAQ:SPLS), I buy food there because it is closer than the local grocery store, and I bought socks there on Saturday because it's closer than the mall. As a customer I can understand the appeal. But as an investor it made me think. * 7 S&P 500 Stocks to Buy With Little Debt and Lots of Profits I decided to take a look at how the CVS stock price has performed over the past five years. Unfortunately, I didn't short it way back then. My instincts appear to have been correct. Shareholders must be very disappointed.Since 2015, the price of CVS shares has fallen from around $110 to around $53. This is a loss of over 50%. In the same time period, the S&P 500 went from 1,900 to 2.900. This is gain of about 33%.According to MarketWatch, CVS posted its first loss in five years in 2018. Earnings per share were $3.99 in 2014, $4.66 in 2015, $4.93 in 2016 and $6.47 in 2017. Then something went wrong.In 2018, the company lost 57 cents a share. In addition, according to the Wall Street Analysts who follow it the projected growth rate is just 7.4X while the projected growth rate for the sector is 11.5X.Maybe this weak performance is a sign of market saturation … or maybe it isn't. But it's not the only dynamic pressuring CVS stock. A more detailed analysis would need to be performed to get a more in-depth understanding of the relevant issues.But I am not giving a trade recommendation.My intent is to show that there is a simple yet important lesson to be learned here.Sometimes it takes a tremendous amount of hard work and due diligence to uncover the clues and signals that will lead to insights into the future price of the stock. But sometimes, as is the case with CVS stock, you can see the clues everywhere you look.At the time of this writing Mark Putrino did not hold any positions in any of the aforementioned securities. More From InvestorPlace * 4 Top American Penny Pot Stocks (Buy Before June 21) * 7 Blue-Chip Stocks to Buy for a Noisy Market * 5 Strong Buy Biotech Stocks for the Second Half * 6 Stocks Ready to Bounce on a Trade Deal Compare Brokers The post CVS Health Stock Has Cannibalized Itself appeared first on InvestorPlace.
Acro Pharmaceutical Services is eliminating 35 positions in Delaware County next month as a result of the closure of its plant in Sharon Hill. Earlier this month, Acro's parent organization, Premier of Charlotte, N.C., agreed to sell its specialty pharmacy business to a CVS Health (NYSE: CVS) subsidiary, ProCare Pharmacy, in a deal valued at $42.5 million.
CVS Health (NYSE: CVS) faces two distinct headwinds that are putting pressure on CVS stock.First, markets are cautious over the drug store and drug manufacturing market as the government pressure all players to lower drug prices.InvestorPlace - Stock Market News, Stock Advice & Trading TipsDoubts over CVS' acquisition of Aetna are adding more distractions for management in the near-term. With CVS stock testing the $51.72 yearly low on at least five occasions since March, what will it take for the stock to rebound?CVS reported first-quarter earnings of $1.62 and also raised its full-year adjusted EPS guidance to $6.75 to $6.90. This is up from the previous guidance of $6.68 to $6.88 a share.The Q1 beat and improved outlook are due largely to the inclusion of managed care operations. The company also included revenue from SilverScript Medicare Part D, which contributed $17.9 billion of revenue for the quarter. * 5 Stocks to Buy for $20 or Less Better synergies with Aetna also contributed favorably to the higher outlook. CVS expects it will exceed its target savings of $750 million in 2020. It found synergies stemming from the elimination of duplication in corporate and operational functions, medical cost savings such as formulary alignment, and purchasing efficiencies. By 2022, CVS forecast saving $1.5 billion to $2 billion, well above its deal synergy targets.CVS forecast cash flow of between $9.8 billion and $10.3 billion and will use $4.2 billion to $4.6 billion to pay down its debt. Its debt/equity of 1.25 times is above that of Cigna Corporation (NYSE: CI) at 0.95, and UnitedHealth (NYSE: UNH) at 0.74, both of which are attractive investments.Despite the less favorable debt/equity, CVS Health pays a dividend yielding 3.69%. Walgreens Boots Alliance (NASDAQ: WBA) also has a lower debt/equity of 0.73 but its dividend is slightly lower too, at 3.35%. Value Investing OpportunityInvestors who think that CVS has deep value with a forward P/E of 7.6 times are betting the company will mitigate near-term headwinds hurting the business. In Q1, prescription growth of 5.5% benefited from the support of clinical care programs and network relationships.The company will improve margins in its long-term care business. And with PBM, the idea of a net cost pricing model is resonating with clients. Some clients will adapt to this offering while CVS expects its uptake improving in 2020 and beyond.CVS is testing new approaches in delivering and managing health care. Its Houston HealthHub stores bring health care services into communities. Meeting people where they are should drum up more business.Still, CVS will primarily use data and analytics to deliver such services at the best cost. Plus, it has a long-term vision of seamlessly connecting consumer experiences across digital and clinical interactions.Initial results from the Houston stores are encouraging. The locations are performing better than expected, giving the company the green light to expand the HealthHUB model. RisksAlthough CVS Health's market share stood at 26.2% in the first quarter, front store comparable sales rose just 0.4%. Adjusted operating income from Retail/Long-term care dropped 18.9%. Reimbursement pressure, higher legal costs, and higher expenses weighed on Q1 results.Should costs grow higher than expected in the course of this year, CVS may lower its guidance. Fortunately, synergies from the Aetna acquisition are tracking higher than the company expected. HealthHUB is resonating well with customers. This is encouraging the company to add more net new items in the front-store of the self-care and wellness areas. Along with expanding MinuteClinic services, CVS will continue expanding the interactions between pharmacists and patients who need it most. ValuationThe 14 analysts offering a price target on CVS stock have an average price of $70.18, which is ~30% above the recent closing price of $54.17. Conversely, investors could assume a perpetuity growth rate of between 5% and 6% in the 5Y DCF Growth Exit model. In this scenario, the fair value of CVS stock is $63 a share, implying an upside of 16% for investors (per finbox.io). Your CVS Stock TakeawayThe CVS and Aetna deal is getting challenged. Investors could bet that the court lets the deal close. More importantly, CVS is already reaping the benefits of the combination by cutting costs. By delivering better services to the customers it services, the company will keep growing.Disclosure: As of this writing, the author did not hold a position in any of the aforementioned securities.Compare Brokers The post CVS Stock Has More Going for It Than Just a 3.69% Dividend Yield appeared first on InvestorPlace.
"Think of the things you need if you’re running errands on a Saturday — go through that list in your head, and they’re all right here."
Value stocks are so out of fashion at the moment that despite being cheaper than they've been in the past 30 years, some experts suggest they're still not the stocks to buy."We could've had this story 10 years ago and talked about the 20-year anniversary of it being a bad market for value," Dave Nadig, managing director of ETF.com, said recently on CNBC. "We could go another 10 years and it could be a bad market for value. I'm not sure that value and growth as an investing paradigm makes that much sense anymore."Another expert who appeared on the same CNBC show as Nadig suggested that you should only buy value stocks heading into a recession or in the first year coming out of one. InvestorPlace - Stock Market News, Stock Advice & Trading TipsUntil either of these situations comes around, Datatrek Research co-founder Nick Colas believes investors ought to stick with growth stocks.I say, not so fast. * 5 Stocks to Buy for $20 or Less I'll select seven stocks to buy for the second half of 2019, all from the top 50 holdings of the Vanguard Value ETF (NYSEARCA:VTV), the biggest value ETF in the U.S. with $48 billion in assets under management. Value Stocks to Buy: Berkshire Hathaway (BRK.A, BRK.B)Source: Shutterstock Berkshire Hathaway (NYSE:BRK.A, NYSE:BRK.B) is the largest of the 338 holdings in VTV with a weighting of 5.6%. Warren Buffett's company continues to have a bad year on the markets, up just 2.2% year to date.However, when you consider that Berkshire had a total return of 3% in 2018, Buffett's working on a 17-month losing streak. That's why I recently provided InvestorPlace readers with seven ideas to make Berkshire Hathaway stock more attractive. I'm as enamored with the holding company as the next person, but it is having a hard time convincing investors who've never owned its stock why they should get on board. With all the talk of it underperforming the S&P 500 in recent years, its sum-of-the-parts valuation still makes it one of the best value stocks to buy inside or outside the index. Long-time investors know this, hence why they continue to hold despite going into a second year of single-digit returns. Also, it's essential to add that its poor performance in 2018 was 739 basis points higher than the index. Verizon (VZ)Source: Shutterstock Verizon (NYSE:VZ) is the 10th-largest of VTV's 338 holdings with a weighting of 1.9%. The second-largest wireless carrier in the U.S. is having a bad year, up just 4% year to date. Worse still, VZ stock is getting pulverized by AT&T (NYSE:T), which is up 14% year to date.In late May, I highlighted the reasons why I thought Verizon was a better buy than T stock.For me, it all comes down to the balance sheet. Verizon's is much healthier due to AT&T's massive purchase of WarnerMedia. AT&T supporters might view Verizon's advantage as a temporary one given HBO's future cash flow generation -- and I get that argument. However, because AT&T has long-term debt that's 71% of its market cap compared to 45% for Verizon -- with price-to-cash flow ratios almost identical -- if I'm a value investor, I have to go with the smaller of the two companies. * 7 Top-Rated Biotech Stocks to Invest In Today AT&T might deliver in the long haul, but the bigger margin of safety lies with Verizon. Caterpillar (CAT)Source: Anthony via FlickrCaterpillar (NYSE:CAT) is the 37th-largest of VTV's holdings with a weighting of 1.1%. The maker of heavy equipment for mines and construction is also having a bad year, up just 4.5% year to date through June 12. That's on top of a 17.3% decline in 2018.The problem for Caterpillar is that the construction industry, its most significant revenue source, could be slowing down. Furthermore, the Asia/Pacific market isn't performing well, and that's got investors worried about the future. As a result of these worries, Caterpillar stock lost more than 14% in May. The issues plaguing CAT stock at the moment have little to do with the company itself and more to do with the global economy. It's something that shareholders can't control. However, with a dividend yield of 3.1%, free cash flow of $4 billion, a free cash flow yield of 3.9%, and a forward P/E of 10.1, CAT stock appears to be trading at below fair value, making a bet on its stock a winning one over the long haul. Morgan Stanley (MS)Source: Shutterstock Morgan Stanley (NYSE:MS) is the 52nd-largest of VTV's 338 holdings with a weighting of 0.82%. The global investment bank is having a decent year, up 11% year to date. When Morgan Stanley reported Q1 2019 results in April, they were nothing to write home about. That said, both its revenue and profits beat analyst expectations. The consensus was for earnings of $1.17 a share on $9.94 billion in revenue. MS delivered $1.39 a share in earnings on $10.3 billion in revenue. More importantly, the company's wealth management business, the company's largest, delivered revenues of $4.39 billion in the quarter, $200 million higher than the estimate. Since taking the reins, CEO James Gorman has focused Morgan Stanley on wealth management and that's ensuring it continues to generate significant revenues and profits. * 10 Stocks to Buy That Wall Street Expects to Soar for the Rest of 2019 Yielding 2.8% and trading at 8.1 times forward earnings, MS stock is cheaper than a lot of the mainline banks. CVS Health (CVS)Source: Mike Mozart via FlickrCVS Health (NYSE:CVS) is the 40th-largest of VTV's 338 holdings with a weighting of 0.94%. Both CVS and its biggest competitor, Walgreens Boots Alliance (NASDAQ:WBA), are having terrible years on the market. CVS and WBA are down 16% and 22% year to date. CVS has been bogged down getting approval from regulators for its $69 billion takeover of Aetna in November. The retail pharmacy chain is transforming its business into a one-stop shop for health and wellness. Aetna's insurance plans will allow CVS to provide its customers with vertically integrated medical care. A report surfaced June 11 that suggested the federal court judge considering whether to allow the merger is leaning toward blocking it from happening. However, CVS strenuously denied that the rumor had any merit. I like CVS' transformation plan and fully expect the deal to go through. Trading at just 7 times cash flow and 8 times forward earnings, CVS is too cheap to ignore. Walt Disney (DIS)Source: Baron Valium via FlickrWalt Disney (NYSEDIS) is the 24th-largest of VTV's 338 holdings with a weighting of 1.56%. After three sub-par years in the markets -- up 0.6%, 4.7%, and 3.6% in 2016 through 2018 -- DIS stock is delivering like gangbusters for shareholders, up 30.2% year to date.I was a fan of Disney before it closed its $71-billion acquisition of 21st Century Fox and I'm still a fan. That being said, I did suggest in March that the Fox deal would do little to boost the company's share price. My feeling is that we won't be able to quantify the success of the deal for at least 3-5 years. In the meantime, Disney's going to be spending like a drunken sailor to ensure Disney+ is a Netflix (NASDAQ:NFLX) killer. I'm facetious, of course. No one, not even the world's largest entertainment company, is going to take Reed Hastings down. At least not overnight. InvestorPlace's Tom Taulli recently wrote a great piece about Disney and artificial intelligence. I recommend you read it. For me, Taulli's article exemplifies why you should own Disney stock -- its use of technology to entertain people is the best on the planet. * 7 High-Quality Cheap Stocks to Buy With $10 Disney's got a lot of moving parts and Bob Iger and the rest of its management team will continue to do what it takes to remain the world's biggest and best entertainment company. It's not dirt cheap, but it's worth every penny. PepsiCo (PEP)Source: Shutterstock PepsiCo (NYSE:PEP) is the 17th-largest of VTV's 338 holdings with a weighting of 2.4%. Since long-time CEO Indra Nooyi stepped down in October, Pepsi stock is up 26.7%, an annualized total return of 40%.Before you get any ideas Nooyi was holding back PepsiCo stock; she delivered a cumulative total return of 136% over 17 years in the top job, including a significant stretch through the 2008 recession which saw PEP stock drop to below $20. The work she did to get the beverage and snack food maker in fighting form in recent years helped her successor, Ramon Laguarta, hit the ground running. Laguarta joined Pepsi Europe in 1996, moving up the ranks until becoming PepsiCo president in September 2017; ascending to the top role when Nooyi retired a year later. Nooyi built an exceptional bench of talent. Case in point: PepsiCo chief commercial officer Laxman Narasimhan just took the CEO job at Reckitt Benckiser (OTCMKTS:RBGLY) -- whose brands include Lysol, Woolite, Calgon, Scholl and Clearasil -- less than three months after being appointed to the newly created role at Pepsi. Pepsi reached on to its deep bench to appoint Ram Krishnan to replace Narasimhan. Krishnan currently runs the company's Greater China business. Trading near a 52-week high of $134.71, PepsiCo stock looks ready to continue moving higher. 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) * 5 Red-Hot IPO Stocks to Buy for the Long Run * 5 Stocks to Buy for $20 or Less * 4 Dow Jones Stocks Ready to Rise Compare Brokers The post 7 Value Stocks to Buy for the Second Half appeared first on InvestorPlace.
WOONSOCKET, R.I., June 17, 2019 /PRNewswire/ -- Given the significant increase in the number of teens using e-cigarettes, CVS Health today announced that it and its charitable foundations will award a total of more than $10 million in 2019 to support youth smoking and e-cigarette prevention strategies and education delivered in classrooms, by clinicians and in communities across the United States. The new commitment, funded through the company and the CVS Health and Aetna Foundations, is part of Be The First, CVS Health's five-year $50 million initiative to help deliver the nation's first tobacco-free generation. According to the 2018 National Youth Tobacco Survey, there are 3.6 million middle and high school students who are current e-cigarette users, a dramatic increase from the more than 1.5 million students the previous year.
It's an odd development to say the least, but a development nonetheless. Federal judge Richard Leon is attempting to prevent the merger of drugstore chain CVS Health (NYSE:CVS) and health insurer Aetna, even though the merger has already been consummated, with Aetna's value being folded into the price of CVS stock in late November.Source: Mike Mozart via FlickrAlthough rare, companies have been forced to unwind completed mergers before. They've never been forced to do so using Tunney Act proceedings, however, and legal experts doubt Leon's efforts will gain much traction.They could prove to be a drag on the CVS story, however, which is already lugging around too much dead weight.InvestorPlace - Stock Market News, Stock Advice & Trading Tips * 10 Stocks to Buy That Wall Street Expects to Soar for the Rest of 2019 Healthcare Mergers Are CommonIt's not the first melding of unlike healthcare organizations we've seen of late. Cigna (NYSE:CI) now owns Express Scripts, and HCA Healthcare (NYSE:HCA) has completed its purchase of Asheville, North Carolina's Mission Health. Even Amazon.com (NASDAQ:AMZN), JPMorgan Chase (NYSE: JPM) and Berkshire Hathaway (NYSE:BRK.B) are teaming up to create a new healthcare outfit intended to cost-effectively serve all three organizations' employees.The common thread among these and dozens of other similar partnerships, of course, is an effort to combat the rising costs of providing healthcare. In most instances, the pairings were allowed to take shape with little fanfare.For reasons that remain mostly unclear, however, this particular deal has prompted a judicial pushback. District Judge Richard Leon's Merger HistoryThe name Richard Leon may ring a bell with some investors. The U.S. district judge is the same that oversaw the Department of Justice's effort to quell the merger of AT&T (NYSE:T) and Time Warner.Leon was largely criticized following his ruling, not just for allowing it to take shape, but for allowing it to take shape without adding any conditions.That's not his only controversial case, however. Indeed, Leon has left a trail of controversial (and often overturned) rulings behind in his career, including politically-charged ones.And, while it would be easy to chalk the judge up as a politically-motivated hack, it would also be unfair; he's proven helpful to not just both political parties, but both philosophical schools of thought. The AT&T deal with Time Warner raises many of the same concerns being raised by the union of Aetna and CVS.The crux of the still-unanswered question is the consent decree that calls for CVS to sell its Medicare Part D business to WellCare Health Plans (NYSE:WCG), while still remaining WellCare's pharmacy benefits manager. Leon's concern "is whether or not the pharmaceuticals will be [offered to WellCare customers] at a lower price and whether they're going to be more readily accessible."Still, to kill the deal at this point would step far out of the bounds of the consent decree process as it's been established. It would also step out of the accepted bounds of Tunney Act hearings. At best, says former DOJ antitrust attorney Andrea Agathoklis Murino, Leon "can say the remedy was insufficient," forcing CVS to do more than simply shed its Medicare D arm. Bottom Line for CVS StockThe development makes for thrilling headlines, though Leon's lacking legal teeth if his intent is to undo what's already been done. All the same, the renewed court battle which could last well into the summer not only serves as a nuisance but keeps shareholders uncertain as to what the company may look like a year from now. That, in turn, is keeping the value of an already-beaten-down CVS stock suppressed.What's largely being overlooked in the legal melee, however, is that such a worst-case scenario has already been more than priced in.As of its most recent look, CVS stock is trading at a dirt cheap forward-looking P/E ratio of 7.6. Even if Aetna and CVS are forced to completely split again, which is unlikely, CVS remains one of the top remaining players in the pharmacy and PBM space, if for no other reason than attrition of its rivals. The more plausible outcome of a deeper separation of its Medicare business, ultimately, could prove to go unnoticed by investors.It's certainly a trade against the current grain but surrounded by doubts and questions, CVS stock looks like a compelling contrarian trade here for investors willing to hunker down for the long haul.As of this writing, James Brumley did not hold a position in any of the aforementioned securities. You can learn more about James at his site, jamesbrumley.com, or follow him on Twitter, at @jbrumley. More From InvestorPlace * 4 Top American Penny Pot Stocks (Buy Before June 21) * 10 Stocks to Buy That Wall Street Expects to Soar for the Rest of 2019 * 7 Value Stocks That Are Flying Under the Radar * 6 Mouth-Watering Fast Food Stocks for Growth Investors Compare Brokers The post Aetna Uncertainty Is Keeping CVS Stock Way Undervalued appeared first on InvestorPlace.
Need more cannabis news? Matthew Broderick, marketing coordinator for SoCal Farms, has a theory as to why unconvential CBD retailers are popping up. The convenience is even more apparent when CBD can be added to products the store already markets, Broderick said.
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 email@example.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.
With more than 2,700 branded locations nationwide, this grocer plans to introduce topical CBD products in a third of all states.
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.
The three main U.S. stock-market indexes ended with slight losses on Tuesday after giving up gains. Investors across the globe had been cheered by news of fresh moves from Beijing to support the Chinese economy, despite President Donald Trump’s latest attack on the Fed.
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 (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.
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.