With its pharmaceutical, diagnostic and insurance services, CVS stock will shine
Despite earnings that beat estimates, CVS Health (NYSE:CVS)
remains in the market’s doghouse. Rich not, CVS stock is trading around $72.
That’s a market cap of $92.5 billion on revenue of $268.7 billion.
Shares are selling for just over 6 times last year’s $15.9
billion in operating cash flow.
Investors are ignoring conservative guidance that it can keep up the
pace.
The market is ignoring most value stocks like CVS, even with
a 2.84% dividend Stocks: Understanding Their Benefits and Risks |
InvestorPlace, because speculators believe all tech stocks are above average.
It’s a fashion that will change as the marketplace separates winners from
losers.
Meanwhile, I took profits in one of my favorite tech stocks
and bought some CVS Health.
One thing the market is ignoring is America’s changing
demographics. I’m the exact age of the average male baby boomer. I turned 66
last month. I still feel good. I plan to keep working. But Father Time remains
undefeated. This is true for my generation as it will be for yours.
While I can still get by on good genetics, that won’t always
be the case. CVS Health and the health care system are going to help me toward
that long dirt nap.
CVS got a one-time boost last quarter from COVID-19 testing
but it has a secret sauce, which investors aren’t crediting it with. That’s
Aetna, the health insurer it bought in 2018.
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