Tag: Omnicare

Is Amazon Threatening CVS Health?

Posted on by Noah Kiedrowski

Noah Kiedrowski - INO.com Contributor - Biotech


Introduction

CVS Health Corporation (NYSE:CVS) has been stuck in a sideways trend since selling off over 24% from August through November 2016. CVS fell from an all-time high of ~$112 per share in 2015 to ~$70 in November of 2016 wiping out 38% of its enterprise value. Since its high of $112 in 2015, a slew of issues negatively impacting its growth and marketplace have plagued the stock. Firstly, the political backdrop was a major headwind for the entire pharmaceutical supply chain from drug manufacturers to pharmacies/pharmacy benefit managers (i.e. CVS and Walgreens) and the drug wholesalers in-between (i.e. McKesson and Cardinal Health). Secondly, recent marketplace trends forced CVS to cut guidance for Q4 2016 and the full-year 2017 numbers. CVS stated that “unexpected marketplace actions that will have a negative impact on our Q4 2016 results and a more meaningful impact on our outlook for 2017”. Thirdly, CVS lost a contract with the Department of Defense which carries tens of millions of prescriptions on an annual basis. A new restricted network relationship between Prime Therapeutics and Walgreens impacts CVS Pharmacy’s participation in selected fully-insured networks in several key states and in many cases make CVS Pharmacy a non-preferred provider for Medicare Part D as well. These prescriptions tend to be the most profitable prescriptions as well. Lastly, Amazon’s purchase of Whole Foods has incited rumors that Amazon is looking to gain entry into the pharmacy space via leveraging the Whole Foods physical footprint of store fronts. I’ve written several articles contending that CVS presents a compelling investment opportunity in the ever expanding healthcare space. My investment thesis was based on proposed sector consolidation (Rite Aid and Walgreens), aging population and growth in long-term care facilities and the pharmacy benefit management segment. All of this in a backdrop of CVS being highly acquisitive, continuing to deliver robust earnings growth, revenue growth, growing dividends and has an aggressive share buyback program in place. It’s a matter of time before CVS will trend higher and in the meantime investors will be paid to wait via dividends and share buybacks. The wildcard may be the Amazon threat with its first real pivot after acquiring Whole Foods with subsequent potential in entering the pharmacy space as well. Continue reading "Is Amazon Threatening CVS Health?" →

CVS Health Check - Stock Appears To Be Consolidating

Posted on by Noah Kiedrowski

Noah Kiedrowski - INO.com Contributor - Biotech


Introduction

It’s time for a health check for CVS Health Corporation (NYSE:CVS) after reporting its most recent quarterly earnings and seeing its stock move in a wide range over the past few months. CVS reported what was ostensibly another great quarter and full-year numbers, reporting a full-year increase of 25.1%, 13.2% and 11.7% in free cash flow, EPS and revenue, respectively. After reporting its Q4 earnings, CVS held steady in contrast to the massive 17% sell-off after reporting its Q3 numbers, moving down from $84 to $70. I’ve written several articles contending that CVS presents a compelling investment opportunity in the ever expanding healthcare space. My investment thesis was based on sector consolidation, aging population and growth in long-term care facilities in combination with the fact that CVS has been highly acquisitive, continues to deliver robust earnings growth, revenue growth, growing dividends and has an aggressive share buyback program in place. With its recent acquisitions of Target’s pharmacies and Omnicare, these proactive measures will significantly expand its presence and ability to dispense prescriptions to the general public and in long-term care facilities. As health care costs and prescription drug costs continue to rise and the population continues to age with the elderly comprising a larger segment of the overall population, CVS looked poised to benefit. However, during the Q3 earnings call CVS noted that recent marketplace trends had forced CVS to cut guidance for Q4 2016 and the full-year 2017 numbers. This guide-down negatively impacted shares however the long-term narrative remains intact. CVS has strong fundamentals and growth and I felt that the previous sell-off after the Q3 release was an overreaction. Since then, Q4 numbers have been released and the share price has retraced the low $80 range and appears to be consolidating for another move up. Continue reading "CVS Health Check - Stock Appears To Be Consolidating" →

CVS - Overreaction or Justified Selloff?

Posted on by Noah Kiedrowski

Noah Kiedrowski - INO.com Contributor - Biotech


Introduction

CVS Health (NYSE:CVS) recently reported what was ostensibly another great quarter reporting a year-over-year increase of 28% and 16% in EPS and revenue, respectively. After reporting its Q3 earnings, CVS sold off 17%, moving down from $84 to $70 at market open. I’ve written several articles putting forth the case that CVS presents a compelling investment opportunity in the growing healthcare space. My investment thesis was based on the fact that CVS has been highly acquisitive, continues to deliver robust earnings growth, revenue growth, growing dividends and has an aggressive share buyback program in place. With its recent acquisitions of Target’s pharmacies and Omnicare, these proactive measures will significantly expand its presence and ability to dispense prescriptions to the general public and in long-term care facilities. As healthcare costs and prescription drug costs continue to rise and the population continues to age with the elderly comprising a larger segment of the overall population, CVS looked poised to benefit. Recent marketplace trends have forced CVS to cut guidance for Q4 2016 and the full-year 2017 numbers. Given this dichotomy between the company’s historically strong fundamentals and share price, was this an overreaction or was the selloff justified? Continue reading "CVS - Overreaction or Justified Selloff?" →

CVS Delivers Strong Second Quarter

Posted on by Noah Kiedrowski

Noah Kiedrowski - INO.com Contributor - Biotech


Introduction

CVS Health Corporation (NYSE:CVS) recently announced fantastic Q2 2016 numbers across the board. Increased EPS growth, revenue and free cash flow coupled with dividends and share buybacks bode well for CVS investors. CVS’s acquisitions of Target pharmacies and Omnicare are becoming fully integrated under the CVS umbrella. Collectively, these are great attributes that drive shareholder value over the long-term. I’ve written several articles presenting a compelling investment opportunity in the growing healthcare space via CVS. My investment thesis is based on the fact that CVS has been highly acquisitive, continues to deliver robust earnings growth, revenue growth, growing dividends and has an aggressive share buyback program in place. CVS recently reported fantastic quarterly results for Q2 2016 in 2016, positioning itself for long-term success. With its recent acquisitions of Target’s pharmacies and Omnicare, these proactive measures will significantly expand its presence and ability to dispense prescriptions to the general public and in long-term care facilities. As healthcare costs continue to rise (specifically prescription drug costs) and the population continues to age with the elderly comprising a larger segment of the overall population, CVS looks poised to benefit. The release of its Q2 2016 earnings reiterates this premise while the company is maintaining its growth narrative. I content that CVS will continue to deliver sustained growth and position itself for long-term success to drive shareholder value. Continue reading "CVS Delivers Strong Second Quarter" →

Will CVS Continue To Deliver Sustained Growth?

Posted on by Noah Kiedrowski

Noah Kiedrowski - INO.com Contributor - Biotech


Introduction

CVS Health Corporation (NYSE:CVS) had recently capped off a fantastic 2015 performance in several metrics (EPS growth, revenue, dividends, share buybacks and acquisitions) that drive shareholder value. I posted that CVS presented a compelling investment opportunity in the healthcare space. This premise was based on the fact that CVS has been highly acquisitive, continues to deliver robust growth, growing its dividends over time and has an aggressive share buyback program. CVS recently reported a record year in 2015 and continues to drive and position itself for long-term success. With its recent acquisitions and partnerships, specifically, the acquisition Target’s pharmacies and Omnicare will significantly expand its footprint and ability to dispense prescriptions to the general public and in assisted living and long-term care facilities that serve the senior patient population. As the United States continues to absorb an aging population alongside growing overall healthcare costs, more specifically prescription drug costs, CVS looks poised to benefit and continue to outperform the broader market. 2015 was a record year for CVS and with a 21% boost in its dividend payout only underscores this premise. The release of its Q1 2016 earnings reiterates this premise and this company is maintaining its growth story. I content that CVS will continue to deliver sustained growth and position itself for long-term success to drive shareholder value. Continue reading "Will CVS Continue To Deliver Sustained Growth?" →