CVS Health Corp (CVS-N)

He is expecting some relief on the regulatory side with less competition. It has a solid dividend yield and lots of cash flow. The stock looks cheap but the earnings are flat-lining.

200-day MA moving lower, stock price is below that. Basing since May. Retail side is the issue. Declining foot traffic, people are buying online. Integration problems with its various businesses. Earnings growth looks weak. 

He prefers growthier names, drug distribution, and traditional pharma like BMY.

They report Wednesday. Listen for what the CEO has to say. He has a big job, because CVS has very jumbled assets. He wishes him the best.

Still owns it and still believes has great assets. It's down because of management turnover and bad capital allocations, but it's fixable and the business is not dead. He has faith in new management.

They cut forecasts and changed their CEO. This continues to get punished (glad he sold it last spring). An aging population is cutting deeply into their margins. Recently, they were talking about breaking up the company. Let's see if the new CEO can right the ship.

Pharmacy side not doing well, as people are switching to online. Pharmacy benefits are doing OK. Basing since May. Seems to be trying to get above water; just today got above the 200-day MA. See if it stays there.

Long term, managed care might be where they'll be OK. Valuation discount in the stock price, but it's a value trap. 9-10x forward earnings, but growth rate is under 2%. He doesn't like to buy on activist shareholders getting in, because you don't really know what's going to happen. He buys based on numbers, with earnings growth in high single digits.

It's been miserable and was exiting some of his position today. Maybe they will sell some of their businesses. Operating insurance and providing benefits has raised their costs and growth a lot. Regulations have also hurt. He doesn't see growth.

All healthcare companies starting in pharmacies have been vertically segments like insurance, but they've had a tough time, because pharmacies are low-margin and getting tougher. Also, governments are getting more involved in drug pricing. Thirdly, post Covid medical procedures remain high which also squeezes margins. He exited CVS 6-8 months ago.

Likes the pharmacy benefits division, but retail is soft and affecting overall earnings and revenues. Consumer is moving more toward online and e-commerce.

Was originally a pharmacy then expanded into insurance and healthcare centres. Long run, it makes sense, but it had faced bumps. Their model will take a lot longer to play out, but they are the best at it. They are more than just a drug store. At current levels, you're fine to hold this.

Has sold shares in company. Unsure on why company has not been able to perform. Better options for investors out there. 

They reported a solid quarter, but cut their full-year forecast for a third time. Total revenues were up YOY and their pharmacy business is doing well. They could turn things around.

The type of company he doesn't like to invest in. Swimming in debt, earnings not growing. What's the catalyst to take it higher? A complete mess. Huge competition. Healthcare space is so tough. There could be value here, but he wouldn't recommend it to anyone.

Market getting tired of missed earnings estimates. Company having trouble keeping sales up across business lines. However, retail presence and business overall still presenting value. Is one of the strong remaining brands left in the retail health companies. If company does not do any more M&A, and keeps balance sheet strong - should be ok. Expecting higher earnings going forward. Will continue to hold.

Reported earnings, stock came down. Will remain in penalty box for a couple of quarters. In a good sector, but continues to make missteps. Value trap right now. Over time should trend back up to $70, but you might be waiting a while.

Gets lumped in with WBA, but they're different businesses. Not keen on either right now, but he'd have a slight preference for CVS, as he knows it better.