CVS: Solid Gains Push Stock Near All-Time High

CVS Caremark Corporation (CVS) has been delivering solid gains to its shareholders in the very challenging environment of 2008. The company's stock price has been driven higher by solid fourth quarter results, reported on Jan 31, that included significant gains in both revenue and income. CVS has officially closed its acquisition of Caremark and is now leveraging that relationship to create synergies and cost-saving strategies.

CVS Caremark Corporation operates retail pharmacy and pharmacy benefit management businesses in the United States. The company, through its stores, offers prescription drugs, generic drugs and general merchandise. CVS was founded in 1892 and is headquartered in Woonsocket, Rhode Island.

CVS Caremark is operating in the consumer staples sector, and this is a slice of the market that has typically been less susceptible to downward pressure when the overall market has displayed signs of weakness. But, in spite of this attractive component, CVS is providing very solid gains to its shareholders.

Shares of CVS have delivered solid returns this year, driven by the company's strong fourth quarter results, reported on Jan 31. Revenue for the quarter jumped 80% to $21.9 billion, up from $12.1 billion in the same period last year. Net income increased 95.3% to $815 million, up from $417.2 million in the same period last year. This produced diluted earnings of 58 cents per share, ahead of the 55 cents that the analyst community was expecting.

Full-year revenue increased 74.2% to a record $76.3 billion, compared to $43.8 billion in 2006.

Same store sales in the CVS/pharmacy division increased 5.3% for the year. CVS opened 139 new retail pharmacy stores for the year.

The company also provided bullish guidance moving forward, saying that it expects profit to grow between 27% and 31%. Revenue is projected to rise 13% and 16% across the company, a byproduct of synergies and cost savings created from the 2007 merger between CVS and Caremark.

Shares of CVS got off to a tough start this year, opening a few dollars short of where they closed for the year in 2007. But after the fourth quarter results hit the street, the company's share price has rebounded very nicely and is now trading in positive territory for the year.

The share price is currently pressuring a very key level just above $41 which has contained prices for the last week. Beyond this level is the 52-week and all-time high just above $42.50. Look for the trend to stay strong and drive prices beyond these two previously mentioned levels.