Just a very quick note here. CVS (CVS) and Aetna (AET) have signed a merger agreement for CVS to buy AET for $145 plus about 5/6 of a CVS share. Because there is some regulatory risk, it's not a "done deal," but I think the odds are weighted significantly toward approval, perhaps with some mild restrictions that would be acceptable to CVS. No matter where CVS has been trading (and I flipped it so don't own it right now), when AET reached $190, I sold. Now, with Amazon (AMZN) buying PillPack, an online pharmacy, all competitors have fallen. CVS is suddenly back to $64 (I may buy it again), but more interesting to me is AET, which I did rebuy on the open around and below $184. I think of it this way: CVS at $60 translates to $54 of equity. Add $145 and the deal is worth $199. If CVS crashes to $54, the deal is still worth $195. I think that a 6% increase in AET is acceptable, because analyst's consensus for AET are for $11 EPS in 2018 and, if the deal fails, for $12.05 next year. That puts AET at perhaps 15X 2019 EPS, which is just fine with me.
So, for a modest price gain potential if the deal goes through, I like AET enough to go long again. If the deal fails, I won't feel like a bagholder as AET is a well-managed company at a reasonable valuation.
Disclosure: I am/we are long AET,CI,ESRX.
Additional disclosure: Not investment advice. I am not an investment adviser.