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Much of the recent news around CVS Caremark Corp. (CVS) has involved its recent $26.5 billion acquisition of Caremark, which was completed two weeks ago. But to me, there are a couple of other things that have looked quite interesting.

I didn't have a single CVS store in my area until about 8 months ago, when the local Savon Drugs stores started undergoing a serious face lift. Within a matter of weeks, these run down stores had been renovated with a clean new look, bright lights and friendlier staff. This happened to all of the 3 Savon's within a 5 mile radius.

Then the marketing campaign kicked in, encouraging shoppers to sign up for the CVS reward card. Shoppers got 10% off their bill at checkout if they signed up for the ExtraCare Account, and 2% cash back on future purchases both in-store and online. I even received a $30 free gift card offer if I submitted a new prescription or transferred an existing one to CVS.

One has to admit that even before the Caremark deal, CVS was much loved by the likes of Goldman Sachs (GS) and UBS (UBS). And who can blame them? CVS is the largest chain of drugstores in the US and trades at a discount to its competitors.

Indeed, CVS trades for a mere 15 times 2008 earnings, while competitor Walgreens (WAG) trades at a multiple of 20. I won't even mention Rite Aid (RAD), which trades at a P/E of 100 (35 times the most aggressive of estimates).

For CVS, the stock has not kept up with the market for the last year - mostly due to the large acquisition of Caremark, but the earnings should improve once the true potential of the acquisition is realized through higher sales and lower costs.

I recommend buying this stock.

CVS 1-yr chart:

Source: CVS: Loved By Customers and Investment Banks