CVS Health CorporationNYSE
Express Scripts Is A Better Investment Than CVS
Uncommon Profit Investor • 21 Comments
Uncommon Profit Investor • 21 Comments
Sun, Oct. 16, 9:49 AM
- "Value investing works like clockwork, but sometimes your clock has to be very slow," says Joel Greenblatt, asked in a Barron's interview about the recent underperformance of some of his funds. The man behind the classic "You Can Be A Stock Market Genius" also published a barely-read "The Big Secret For The Small Investor" five years ago, noting, among other things, that average investors tend to dump good strategies at precisely the wrong time.
- Favorite longs in his long/short portfolio now include Apple (NASDAQ:AAPL), with double-digit cash flow yields vs. the S&P 500 at less than half of that. "People worry that it’s effectively a hardware company that will crash and burn. But it’s also an ecosystem of products that play with one another and a brand people like."
- He owns not just Apple, he says, but a "bucket" of Apples - companies with gushing cash flow, huge returns on capital, and nice market niches. Qualcomm (NASDAQ:QCOM) and CVS fit the bill.
- On the short side is Salesforce.com (NYSE:CRM) at 218x pretax earnings and 7x sales. Even if optimistic earnings estimates prove true, it's still selling for 50x. Others include Costco (NASDAQ:COST) - a great retailer, but still a retailer - at 28x earnings, but not growing and also competing with Amazon. Another is Caterpillar (NYSE:CAT), which has fans thanks to its 3.5% yield, but doesn't earn enough to pay that dividend.
- Gotham funds: GENIX, GARIX, GONIX, GINDX
Wed, Sep. 28, 9:19 AM
- Private equity firms aren't showing a great deal of interest in the 650 retail stores being unloaded by Walgreens Boots Alliance (NASDAQ:WBA) in order to comply with the FTC's ruling on the Rite Aid (NYSE:RAD) merger, reports New York Post. Many of the stores are seen as unprofitable investments.
- The lack of interest could pave the way for CVS Health (NYSE:CVS) to step in and buy stores selectively if the FTC and Walgreens back off the stated goal of finding a single buyer.
- The 650 units on the sales block only represent 5% of the total Walgreens-Rite Aid store count.
Thu, Sep. 22, 12:19 PM
Thu, Sep. 15, 9:02 AM
- Retail sales fell in August on a month-over-month comparison. The drop wasn't a large surprise considering the onslaught of warnings from the retail sector on store traffic.
- 8 out of the 13 retail categories showed negative growth during the month, with the largest drops recorded in the building material/garden equipment/supplies dealers and miscellaneous store retailers categories. The broad weakness turned on its head the argument that money freed up from a lower level of auto sales would be funneled into other consumer purchases.
- Food services and drinking places showed a +0.9% M/M and +5.8% Y/Y increase in a somewhat surprising result considering the harsh read from Black Box Intelligence on August same-store sales in the restaurant sector BITE. Is the discrepancy an indication that independent restaurants are taking market share?
- On a year-over-year basis, retail sales were up 1.9%. As expected the Amazon-influenced nonstore retailers category did the heavy lifting with an 11% gain. Larger U.S. retail chains (WMT, SPLS, TGT, BBY, DG, COST, KR, WBA, CVS, LOW, HD, SWY) have been raising the issue of pricing pressure in recent conference presentations and guidance updates which could be a nagging sales deflator for the balance of the year.
- Previously: Retail sales disappoint in August (Sept. 15)
- Retail ETFs: XLP, XLY, VDC, XRT, VCR, RTH, RETL, FXG, PBJ, IYK, FXD, IYC, RHS, FDIS, PEJ, FSTA, PSL, SCC, RCD, UCC, PEZ, PMR, PSCC, UGE, PSCD, SZK, BITE, CNDF, CNSF, IBUY, JHMC, JHMS.
Tue, Aug. 2, 10:03 AM
- CVS Health (CVS +3.8%) Q2 results: Revenues: $43,725M (+17.6%); Operating Income: $2,350M (+3.9%); Net Income: $924M (-27.4%); EPS: $0.86 (-23.2%); Non-GAAP EPS: $1.32 (+8.2%); Quick Assets: $1,207M (-52.6%); CF Ops: $4023M (+33.2%).
- Q3 Guidance: GAAP EPS: $1.38 - 1.41; Adjusted EPS: $1.55 - 1.58.
- 2016 Guidance: GAAP EPS: $4.92 - 5.00 from $5.24 - 5.39; Adjusted EPS: $5.81 - 5.89 from $5.73 - 5.88; CF Ops: $8.8B - 9.1B from $7.6B - 7.9B; FCF: $6.3B - 6.6B from $5.3B - 5.6B.
Tue, Aug. 2, 6:58 AM
Mon, Aug. 1, 5:30 PM
- ABC, ACCO, ADM, AET, AFSI, ALLT, ARW, AVP, BOFI, CAH, CARB, CEQP, CHH, CIE, CMI, CPPL, CSTM, CVS, DISCA, ECL, EIGI, EMR, ENOC, EPC, ETN, ETR, EXPD, FDP, GEO, GLT, GNRC, H, HCLP, HCN, HEP, HMC, HRS, HW, IDCC, IDXX, IIVI, IPI, IQNT, JLL, MLM, MMP, MNK, MOS, MZOR, NI, NJR, NNN, NRZ, NS, NWN, OZM, PBI, PFE, PG, PNW, RCL, RDC, RHP, SABR, SALE, SCAI, SHOO, SHPG, SODA, STX, SUI, TAP, TDC, VG, VSH, WCG, WNR, WNRL, XYL, ZEUS
Wed, Jul. 6, 1:12 PM
Sun, Jul. 3, 2:50 PM
- via Barclays:
- "Although stocks in the U.S. and Europe have partially bounced back from the sharp selloff sparked by the U.K. referendum result, risks remain prevalent. [Analyst] Keith Parker foresees further equity downside alongside a prolonged market bottoming process, during which positioning is likely to turn much more defensive at active managers.
- "With this in mind, our stock screen this week highlights Overweight-rated stocks that screen defensively based on sector and equity beta but are also expected to generate superior ROE and free cash flows in FY1.
- "Our screen considers the following factors: i) Large-cap (US $5 billion+) stock in the consumer staples, utilities, telecom or healthcare sectors. ii) Adjusted beta less than 1.0. iii) Rated Overweight by Barclays equity research. iv) 15%+ ROE and 4.5%+ FCF yield expected in FY1, based on Barclays estimates."
- The stocks: Aetna (NYSE:AET), BT Group plc (NYSE:BT), Cardinal Health (NYSE:CAH), Coloplast (OTC:CLPBF, OTCPK:CLPBY), CVS (NYSE:CVS), Estee Lauder (NYSE:EL), Express Scripts (NASDAQ:ESRX), Glanbia (OTC:GLAPF, OTCPK:GLAPY), Grifols (NASDAQ:GRFS), Imperial Brands (OTCQX:IMBBY, OTCQX:ITYBF), Johnson & Johnson (NYSE:JNJ), Ahold (OTCQX:AHONY, OTCQX:AHODF, OTCQX:AHOND), LabCorp (NYSE:LH), Perrigo (NYSE:PRGO), Telus (NYSE:TU), Unilever (UL, UN), UnitedHealth Group (NYSE:UNH)
- See full table here.
Mon, Jun. 27, 11:16 AM
- The outperformance of low-P/E stocks that marked H1 is behind us, says RBC's Jonathan Golub, and it's time for the "Stable Growers" to re-asset leadership. He cautions about putting money to work too quickly though, noting the pullback so far has been limited.
- His list of Stable Growers (page 1, page 2): CHD, CL, CVS, K, MO, PEP, PG, PM, BCR, BDX, DGX, DVA, HSIC, JNJ, LH, MDT, SYK, TMO, UNH, ZBH, AFL, AON, MMC, TMK, CTAS, DHR, HON, ITW, LMT, MMM, NLSN, RSG, RTN, UPS, VRSK, WM, XYL, CMCSA, MCD, OMC, ADP, APH, EMC, MA, T, VZ, ECL, PX
Fri, Jun. 24, 7:01 AM
- Cerner (NASDAQ:CERN) upgraded to Buy from Neutral with $65 (14% upside) price target by SunTrust Robinson.
- Catalent (NYSE:CTLT) upgraded to Outperform from Market Perform with a $26 (midpoint)(10% upside) price target by Wells Fargo. Upgraded to Buy from Neutral by Bank of America.
- Centene (NYSE:CNC) upgraded to Overweight from Equal Weight by Barclays. Price target raised to $82 (17% upside) from $76.
- Valeant Pharmaceuticals (NYSE:VRX) downgraded to Neutral from Overweight by JPMorgan. Price target lowered to $35 (57% upside) from $50.
- AveXis (NASDAQ:AVXS) downgraded to Hold from Buy by Jefferies. Price target lowered to $39 (3% downside risk) from $42.
- Surgical Care Affiliates (NASDAQ:SCAI) downgraded to Neutral from Buy by JPMorgan. Price target maintained at $48 (3% upside).
- ACADIA Pharmaceuticals (NASDAQ:ACAD) downgraded to Neutral from Buy by Bank of America.
- Express Scripts Holdings (NASDAQ:ESRX) downgraded to Underweight from Equal Weight by Morgan Stanley. Price target raised to $70 (9% downside risk) from $67.
- Perrigo (NYSE:PRGO) downgraded to Hold from Buy by Argus Research.
- CVS Health (NYSE:CVS) downgraded to Equal Weight from Overweight by Morgan Stanley. Price target lowered to $104 (11% upside) from $111.
Tue, May 3, 8:00 AM
- CVS Health (CVS +0.96%) Q1 results: Revenues: $43,215M (+18.9%); Operating Expense: $4,568M (+13.3%); Operating Income: $2,176M (+2.1%); Net Income: $1,146M (-6.1%); EPS: $1.04 (-2.8%); Non-GAAP EPS: $1.18 (+3.5%); Quick Assets: $1864M (-26.8%); CF Ops: $2,412M (21.6%).
- Q2 Guidance: GAAP EPS: $1.17 - 1.20; Adjusted EPS: $1.28 - 1.31.
- 2016 Guidance: GAAP EPS: $5.24 - 5.39 from $5.28 - 5.43; Adjusted EPS: $5.73 - 5.88; CF Ops: $7.6B - 7.9B; FCF: $5.3B - 5.6B.
Tue, May 3, 6:57 AM
- CVS Health (NYSE:CVS): Q1 EPS of $1.18 beats by $0.02.
- Revenue of $43.22B (+19.0% Y/Y) beats by $210M.
Mon, May 2, 5:30 PM
- ABMD, ACW, ADM, AFSI, ALE, ALLT, AMAG, AMG, APLP, AROC, ARRY, ARW, AUDC, BBW, BCC, BCO, CARB, CEQP, CFX, CIE, CLX, CMI, COTY, CVLT, CVS, DUK, ECA, ECL, EIGI, EL, EMR, EXAS, FDP, FIS, FMS, FSS, FTR, GLDD, GLT, GRUB, H, HAL, HCA, HCN, HEP, HOT, HRS, HSIC, HW, KEM, KMT, LXRX, MNK, MNTA, MYL, NI, NTI, NWN, NXST, NYT, OZM, PBI, PFE, Q, RDWR, RHP, RRD, S, SALE, SALT, SGNT, SMG, SSH, TAP, TECH, TICC, VLO, VMC, VSH, WAC, WCG, WEC, WLK, WNR, WNRL, WWW, XYL
Fri, Apr. 29, 3:03 PM
- Low volatility stocks are besting the broader averages this year, with the SPLV up 3% and the USMV up 4% vs. the 0.7% advance for the S&P 500.
- While the consumer staples that make up much of the low vol names are expected to do well in the rocky times seen in 2016, at 21x earnings, they're getting pricey.
- Picking through individual names though, Barclays' Jonathan Glionna has come up with a list of low volatility names which can still be deemed not expensive.
- In consumer staples: AutoZone (NYSE:AZO), Darden (NYSE:DRI), Time Warner Cable (NYSE:TWC), Clorox (NYSE:CLX), Coca-Cola (NYSE:KO), CVS, Hormel (NYSE:HRL), J.M. Smucker (NYSE:SJM).
- In utilities: Entergy (NYSE:ETR), PG&E (NYSE:PCG), PPL.
Thu, Apr. 14, 1:36 PM
- Morgan Stanley identifies 30 stocks for investors to snap up and hold until 2019.
- The investment firm narrowed its list by focusing on strong brands/franchises with distinct competitive advantages, while also scoring strong on pricing power, cost efficiency, and growth.
- The MS list includes Accenture (NYSE:ACN), Alphabet, Amazon.com, Apple, Blackstone Group (NYSE:BX),Comcast (NASDAQ:CMCSA), Constellation Brands (NYSE:STZ), CVS Health (NYSE:CVS), Danaher (NYSE:DHR), Dollar General (NYSE:DG), Estee Lauder (NYSE:EL), Facebook, First Republic Bank (NYSE:FRC), HCA Holdings (NYSE:HCA), International Business Machines (NYSE:IBM), JPMorgan Chase, L Brands (NYSE:LB), Mettler-Toledo (NYSE:MTD), NextEra Energy (NYSE:NEE), Nike (NYSE:NKE), Panera Bread (NASDAQ:PNRA), Philip Morris International (NYSE:PM), Public Storage (NYSE:PSA), Ross Stores (NASDAQ:ROST), SBA Communications(NASDAQ:SBAC), ServiceMaster (NYSE:SERV), T-Mobile (NASDAQ:TMUS), Visa (NYSE:V), WhiteWave Foods (NYSE:WWAV), and Zayo Group Holdings (NYSE:ZAYO).