CVS

Opinion: Is Amazon Prepared to Tackle the Pharmacy Market?

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The meteoric rise of Amazon, both with respect to the breadth of its business operations and stock price, continues. On news of the rumor of its potential entry into the pharmacy market, entities speculated that may feel an impact immediately sold off. Though it’s much too early to estimate the extent of any impact Amazon’s entrance into the pharmacy market may bring, let’s take look at potential implications, courtesy of healthcare and biotech contributor Alexander J. Poulos. By Alexander J. Poulos Recent Amazon Hire Ignites Speculation Amazon (AMZN) has quietly added a leader to build an in-house Pharmacy Benefit Manager (PBM) for its employees. Mark Lyons, formerly of Premera Blue Cross, has joined the e-commerce and web services giant, and … Read more

Valuentum’s 3 Breakthroughs in the Field of Finance and More

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Valuentum’s President Brian Nelson pauses for a picture before speaking at the CFA Society of Houston in March 2017. By Valuentum Editorial Staff Let’s cover Valuentum’s 3 major breakthroughs in the field of finance. The first one is big and may challenge you to rethink everything you think you know about investing. 1. On a logical framework, Valuentum has debunked John C. Bogle’s landmark syllogism that has paved the way for the concept of index investing. Index investing has been built on a logical shortcoming, whether supported by evidence or not. We think it is important that the investment community know of this. Read (pdf): The “Luck” and “Randomness” of Index Funds (2018), Brian Nelson, CFA See video documentation: /FALLACY_of_Index_Funds To … Read more

Sanofi: The First Victim in the Great Insulin Price War

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The steady growth expected from Diabetes products has come to an abrupt halt. Is Sanofi adequately prepared to replace the revenue loss of its top-selling product? By Alexander J. Poulos and Kris Rosemann The diabetes pandemic continues to expand at a rapid pace. Diabetes is a condition where the body is unable to regulate the amount of sugar found in the blood correctly, and it is differentiated into two distinct types. Type one diabetes is defined as a condition where the body does not produce any insulin, thus requiring regular supplementation to maintain proper regulation. The second and more common version is Type 2 diabetes where the body loses the ability to produce an adequate amount of insulin to regulate … Read more

Recent Material Fair Value Estimate Changes

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By Kris Rosemann Let’s begin this edition of ‘Recent Material Fair Value Estimate Changes’ with a discussion of some of the highest-profile names that made the list. If you require background reading on why we make changes to our valuation models, please see: What Causes Fair Value Estimates to Change? We’ve raised our fair value estimates for two of the holdings in the newsletter portfolios, General Electric (GE) and Union Pacific (UNP). The sprawling and evolving industrial portfolio of General Electric is one of the more exciting portions of our portfolios, as the industrial giant boasts assets with authoritative positions in areas from the rapidly expanding Industrial Internet of Things to the rebounding energy services space. An increase in near-term … Read more

PBMs: Express Scripts and CVS’ Looming Victory?

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Image Source: Victor We’re expecting a big win at CVS in coming years, and it may come at the expense of Express Scripts. By Alexander J. Poulos With the recent addition of CVS Health (CVS) to the newsletter portfolios, we believe the sell off in the Pharmaceutical Benefit Managers (PBM) industry is overdone. We are intrigued by the free cash flow generated from a highly-predictable business model, and that the PBM’s negotiate contracts in advance, locking in a customer for an extended period, only adds to the attractiveness of their operations. Another PBM, but a pure play, is Express Scripts (ESRX). Let’s discuss the unique characteristics of Express Scripts along with notable risks, which prevented us from adding the name … Read more

CVS Health In The Bargain Bin? We Think So

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Image Source: Mike Mozart By Alex Poulos The stock market can be a fickle creature, bestowing its affections seemingly upon random industries. As 2016 comes to a close, the financial and energy-related names are all the rage with many pundits gushing about their prospects in 2017. I have often found when the Street is waxing eloquently about a certain sector, most of the easy gains have been made. Often, a contrarian view is necessary to generate acceptable returns. An unusual opportunity is before us in a company that operates in one of the most unloved fields of all, healthcare. CVS Health CVS Health (CVS) is generally categorized in the consumer staples (XLP) sector of the S&P 500, yet over 85% … Read more

Restaurant Traffic – What’s Going On?

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By Kris Rosemann What’s going on with restaurant stocks these days?  Sonic’s (SONC) announcement of preliminary results for the fiscal fourth quarter of 2016, ended August 31, has been the latest catalyst to drag the restaurant sector (BITE) lower due to it reporting “lower-than-expected traffic, reflecting lower consumer spending in restaurants and continued aggressive competitive activity.” Our newsletter portfolios have not been spared the pain as shares of Dividend Growth Newsletter portfolio holding Cracker Barrel (CBRL) have faced pressure since its fiscal fourth quarter report September 14, and Best Ideas Newsletter portfolio holding Buffalo Wild Wings (BWLD) has suffered as a result of the weak data as well. Sonic’s report was not the first we’ve been hearing of slowing consumer … Read more

Same Stories Prevail at Walmart and Target

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When consumers think of retail, Walmart (WMT) and Target (TGT) are probably two of the biggest companies that come to mind. After all, the two big box retail giants have taken the US by storm throughout much of the 1990s and 2000s. But the shift to e-commerce with the proliferation of Amazon (AMZN) and eBay (EBAY) coupled with broad-based consumer backlash with respect to worker wages and credit card breaches, respectively, have created a whirlwind of negative public perception at the two giants as of late. Will worker unrest and Target’s failed attempt to expand beyond the borders of the US mark the generational stock price peaks at the two giants, respectively? Are both past their prime? The likelihood of … Read more

If It Happened to AbbVie, Could It Also Happen to Gilead?

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The Valeant (VRX) and Citron saga is not all the drama happening in biotech these days. On October 22, federal health officials warned doctors and patients that two of AbbVie’s (ABBV) hepatitis C treatments can cause life-threatening liver injury in advanced stage patients. The Food and Drug Administration announced October 22 that it will require AbbVie to add new warnings to its Viekira Pak (1) and Technivie (2) drugs after deaths and liver transplants have been reported in patients who already had liver damage caused by the disease. During the second quarter, global sales of Viekira were $385 million, on pace for blockbuster status. Viekira is one of AbbVie’s top drugs, trailing only Humira in sales during the six months … Read more

Quick Take: Gilead Blows By 2Q Estimates; Investors Getting Drug Pipeline for Free

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Gilead (GILD) has delivered. The company’s second-quarter 2015 results showed product sales of $8.1 billion and non-GAAP earnings per share of $3.15, up 27% and 33%, respectively, from the same period a year ago. For those that don’t know Gilead, the company’s hepatitis C powerhouse drug, Harvoni (ledipasvir 90 mg/sofosbuvir 400 mg), led to the quarterly outperformance. We continue to believe the market is 1) underestimating the sustainability of Harvoni (both the number of potential patients to be treated globally and pricing resiliency) as well as its drug development pipeline, which we believe investors are getting for free. Gilead is a holding in the portfolio of the Best Ideas Newsletter, and we don’t expect to make any changes following the … Read more