|Bid||192.94 x 1000|
|Ask||196.02 x 800|
|Day's Range||192.65 - 194.04|
|52 Week Range||169.96 - 204.83|
|PE Ratio (TTM)||N/A|
|Beta (3Y Monthly)||0.91|
|Expense Ratio (net)||0.43%|
Institutional investors and hedge funds have shifted away from technology names as the U.S.-China trade war extends and picked up battered healthcare names. Retail investors can also gain exposure to the ...
Few sectors face so much pronounced change than the broader health care industry. It's one of the reasons why sector benchmarks like the iShares U.S. Healthcare ETF (NYSEARCA:IYH) have been so choppy lately. However, CVS Health (NYSE:CVS) has absorbed significant levels of volatility over the past few years. Since the January opener, CVS stock is down almost 14%.Source: Shutterstock And one of the biggest threats to the long-term viability of CVS Health stock is a three-word concept: pharmacy reimbursement rates. To make an incredibly long and complicated story short, this is how pharmacies get paid the bulk of their revenue.Essentially, pharmacies receive reimbursement for the medications they provide to patients. Unfortunately for CVS stock and its ilk, the reimbursement rate has been falling for several years. And in some situations regarding generic drugs, pharmacies receive a reimbursement rate lower than the original acquisition cost.InvestorPlace - Stock Market News, Stock Advice & Trading TipsObviously, this has a negative impact on CVS Health stock, along with shares of rivals like Walgreens Boots Alliance (NASDAQ:WBA). If the rates don't meaningfully improve for the industry, pharmacies risk running in the red. * 10 Tech Stocks That Are Still Worth Your Time (And Money) And that's really the underlining context behind CVS's "disastrous" fourth quarter of 2018 earnings report. On paper, the results CVS posted weren't that bad. Although management just missed its revenue target, it delivered a solid beat on per-share profitability. Against an earnings-per-share estimate of $2.04, actuals came in at $2.14.However, the executive team revealed a lower-than-anticipated profitability outlook for this year. At the time, management stated that half of the decline will result from investments along with challenges -- such as e-commerce competition -- in the long-term care business. Still, a good chunk of the profitability pressure stems from reimbursement pressures.As such, this will be a transitional year for CVS stock. Difficult but Rational Case for CVS StockI wouldn't blame anyone for not wanting to touch CVS Health stock with a 20-foot pole. Over the last four years, shares have suffered under an unrelenting bearish trend channel. Naturally, prospective buyers will want to hear more than just simple sentiment that things can't get worse.Clearly it can, and so far, it did.That said, CVS stock does have a difficult but rational case for any risk-tolerant speculator. I'll start with the most obvious bullish argument: the markets have had ample time to digest the bad news in CVS and its rivals. Although it's not out of the realm of possibility, I don't see shares sliding on merely reworded bearish news.Second, the reimbursement headwind and related challenges are factors that affect everyone in the space. While an obvious statement, it levers a substantial impact on CVS stock. That's because incoming rivals in the space such as Walmart (NYSE:WMT) are typically multi-faceted organizations. Simply, they have other concerns besides pharmacy-related obstacles.And recent data indicates that would-be disruptors are disrupting themselves. For instance, Walmart announced that they're eliminating pharmacy jobs as the company moves to streamline operations. To me, the optics suggest that otherwise-mighty Walmart bit off more than it can chew.This news also reminds me about the company's threats to leave CVS Health's network over a pricing dispute. Walmart later retracted the aggressive rhetoric, saying the parties settled their differences. Again, the perception is that Walmart is in over its head. * 7 Defense Stocks to Buy to Fortify Your Portfolio By default, this provides some confidence toward CVS Health stock, where the underlying company is the expert in the field. Insulated from E-commerce ThreatOf all the changes that have happened in retail, Amazon (NASDAQ:AMZN) is responsible for most of them. Indeed, traditional retailers have had to change their strategies to keep pace with this e-commerce juggernaut.CVS is no different. However, what is different is that the company's business model is naturally insulated from Amazon's encroachment. According to the Harvard Business School, very few people buy their medication online. Thus, through simply existing, CVS Health stock has an advantage over AMZN.It goes without saying that Amazon has aggressively beefed up its supply chain, making offers such as next-day shipping. But that probably won't hurt CVS stock as much as you might think.Here's the deal: some things are simply better offline. Medicine is something I don't mess around with. I'm sure millions more feel the same way. A comfort level exists with in-person pharmacies that the online platform will never replicate.And e-pharmacy, if you will, is an issue with which the federal government is seriously concerned. It doesn't take much for nefarious agents to sell prescription drugs illegally. Potentially, one bad and highly publicized incident could cripple this burgeoning industry.However, CVS stock doesn't face that risk. At its core, it's a pharmacy investment. It might be boring but it works. That might be the message that finally brings shares out of the dumpster.As of this writing, Josh Enomoto did not hold a position in any of the aforementioned securities. More From InvestorPlace * 2 Toxic Pot Stocks You Should Avoid * 10 Stocks to Buy From This Superstar Fund * 7 Stocks to Buy This Summer Earnings Season * 7 Marijuana Penny Stocks to Consider for Those Who Can Handle Risk The post Here's The Not-So-Crazy Speculative Case for CVS Health Stock appeared first on InvestorPlace.
With earnings surprise in cards, the healthcare sector is expected to witness earnings growth of 1.7% in the second quarter, suggesting continued outperformance for healthcare ETFs.
Ruud Dobber, AstraZeneca’s biopharmaceuticals president, weighs in on the Trump administration walking back one change it had been seeking in the drug space.
Investors are seeking to beat the fresh tariff woes by betting on defensive sectors like utilities, real estate, healthcare and consumer staples. We have highlighted one ETF each from these four zones.
Healthcare stocks have fallen somewhat out of favor, as tech and faster growing industries have lead the rally in equities this year. There is a prevailing notion that healthcare stocks are defensive, given their business models and the dividends they pay to their shareholders. However, there are standouts in the sector that are poised to deliver growth, spurred by new approvals and new markets.Source: Shutterstock For those looking for a diversified approach to investing in healthcare stocks, Health Care SPDR (NYSEARCA:XLV) and iShares Dow Jones US Healthcare (NYSEARCA:IYH) are good options that are relatively liquid. The two funds track each other very closely, though there is a slight difference between their yields. XLV yields 1.6%, while IYH has a slightly higher yield of 1.9%. * 7 Energy Stocks to Buy to Light Up Your Portfolio For investors looking to bet on individual stocks, Merck & Co (NYSE:MRK) and AbbVie I(NYSE:ABBV) look like particularly good options. Within the XLV fund, MRK stock makes up 6% of overall holdings and ABBV stock accounts for 3.5% of its assets.InvestorPlace - Stock Market News, Stock Advice & Trading TipsMRK stock and ABBV stock are primed to bounce back after both dropped slightly recently. Their performance should help offset any potential weakness of the fund's other holdings, including Johnson & Johnson (NYSE:JNJ).JNJ stock is by far XLV's largest holding, comprising over 11% of its total assets. Though I have concerns about the legal risks facing JNJ stock, the benefit of owning the index is that its diversification reduces the risk posed by each stock. Healthcare Stocks to Buy: MRKMerck demonstrated its ability to execute on its global strategy in the first quarter, generating double-digit percentage sales and earnings per share growth, no small feat, considering that the market cap of MRK stock is over $200 billion. MRK's investments in research and development are clearly paying off, and the owners of MRK stock should be very positive about the company's 2019 outlook.The company's China business generated a large part of its growth, driven by high sales of its oncology drugs and vaccines there. Excluding the negative impact of currency fluctuations, its China sales soared 67% year-over-year. China is a huge market with significant demand, but it's not an easy nut to crack. Many multinational corporations spanning various industries have struggled to generate profits there. Merck's ability to drive sales in China bodes well for its future growth and for MRK stock.On the oncology front, the FDA's approval of MRK's Keytruda for a number of indications, including advanced renal cell carcinoma and melanoma with lymph nodes, was a big win for MRK stock. The EU also approved Keytruda in combination with chemotherapy. Sales of Keytruda were up 55% year-over-year in Q1.Expect further approvals of MRK's oncology drugs throughout the year to provide a boost to MRK stock. A number of the company's animal-health treatments could also be approved. Healthcare Stocks to Buy: ABBVABBV stock hasn't maintained as much upward momentum as I would have expected after it reported very solid Q1 results. This global pharmaceutical company focuses on four therapeutic areas: immunology, oncology, virology and neuroscience. ABBV is a healthcare stock that has a lot of potential, given the strength of the company's pipeline.ABBV's quarterly sales and earnings both beat expectations, leading ABBV to increase its full-year EPS guidance from $7.26 to $7.36. Most importantly, the company's pipeline advanced meaningfully. Notably, the FDAand the Japanese Ministry of Health, Labour and Welfare both approved the company's SKYRIZI treatment, which could improve the standard of care of psoriasis.Those were big wins in a therapeutic area with a great deal of long-term potential. ABBV has multiple other products making their way through the approval process, setting the stage for ABBV stock to benefit from multiple positive catalysts in the near future.In oncology, AbbVie announced a strategic partnership with Teneobio, a biotechnology company that's developing a new class of biologics for the treatment of cancer, autoimmunity and infectious diseases. The two companies have agreed to develop and commercialize a biologic calledTNB-383B for the potential treatment of multiple myeloma.ABBV' has several other ongoing collaborations that will expand its oncology research platform, enabling it to develop life-changing treatments andmeaningfully boost ABBV stock.As of this writing, Luce Emerson did not hold a position in any of the aforementioned securities. More From InvestorPlace * 2 Toxic Pot Stocks You Should Avoid * The 10 Best Stocks to Buy for May * 7 Stocks Worth Buying When They're Down * 7 of the Best ETFs to Buy for a Slowing Economy Compare Brokers The post Two Healthcare Stocks in the XLV Fund Stand Out appeared first on InvestorPlace.
With negative earnings revisions, the healthcare sector is expected to witness earnings growth of 1.8% in the first quarter, suggesting smooth trading for healthcare ETFs.
UnitedHealth Group reported robust first-quarter 2019 results. The company breezed past the Zacks Consensus Estimate on both earnings and revenues and raised its full-year forecast.
Johnson & Johnson continued its long streak of earnings beat and also outpaced revenue estimates. Though it raised the guidance for full-year sales growth, it tightened the earnings per share forecast.
For example, the iShares US Healthcare ETF (IYH) , which tracks the Dow Jones U.S. Health Care Index, is higher by about 7% this year. The $2.34 billion IYH devotes about 53% of its combined weight to pharmaceuticals and medical equipment stocks. Consequently, investors may also turn to defensive sectors that are less economically sensitive, such as health care.
With lower negative earnings revisions, the healthcare sector is expected to witness earnings growth of 7.7% in the fourth quarter, suggesting continued outperformance for healthcare ETFs.
Johnson & Johnson expects its sales growth to slow down this year due to pricing pressures and generic-drug competition for its pharmaceutical division. This has put healthcare ETFs in focus.
Compared to other sectors, healthcare was sturdy in 2018 and while the sector looks close to being fairly valued, the group could offer more upside this year. The Health Care Select Sector SPDR ETF (XLV) , the largest healthcare ETF by assets, gained 6.30% last year. XLV allocates about two-thirds of its combined weight to pharmaceuticals and biotechnology stocks.
Even the best ETFs can cause serious pain for investors when buys are made in the middle of a bear market. Read The Big Picture column for market guidance.
While there have been losers in most corner of the space, several ETFs still managed to end the year in green and are likely to continue outperforming in 2019 too.
In a lackluster year for stocks, health care proved to be one of the best sectors, a big reason why iShares U.S. Healthcare is now among the best ETFs.
The U.S. equity rally is beginning to lose steam and investors should not expect markets to maintain their breakneck spurt of yesteryear. Nevertheless, traders may still find value in some battered sectors ...
As U.S. markets continue to wobble, investors who want to stay in the game can look to defensive sector-related ETFs for a more steady approach. “If the sell-off continues and it deepens, it’s going to ...
Even as the Democrats retook control of the House of Representatives and the Republicans maintained majority in the Senate, healthcare ETFs were also big winners following the 2018 Midterm Election results. ...
Count the iShares US Medical Devices ETF (NYSEArca: IHI) and the iShares US Healthcare ETF (NYSEArca: IYH) among the healthcare exchange traded funds that could be affected by the results of the upcoming ...
As we discussed earlier, Pfizer’s (PFE) product portfolio is classified into two segments—the Innovative Health segment and the Essential Health segment. In this part, we’ll discuss Pfizer’s market capitalization and shareholding pattern.