Stock on Focus: CVS Health Corporation (CVS)

Company Profile:

CVS Health Corporation, together with its subsidiaries, is a pharmacy company. The Company operates through three business segments: Pharmacy Services, Retail Pharmacy and Corporate. The Pharmacy Services segment provides a range of pharmacy benefit management (PBM) services and operates under the CVS/caremark Pharmacy Services, Novologix and Navarro Health Services names. The Retail Pharmacy segment sells prescription drugs and an assortment of general merchandise, including over-the-counter drugs, beauty products and cosmetics, personal care products, convenience foods, photo finishing, seasonal merchandise and greeting cards through the Company’s retail stores, online retail pharmacy Websites and retail healthcare clinics. The Corporate segment provides management and administrative services to support the overall operations of the Company. The company was formerly known as CVS Caremark Corporation and changed its name to CVS Health Corporation in September 2014. CVS Health Corporation was founded in 1892 and is headquartered in Woonsocket, Rhode Island.

Recent News:

CVS Health Corporation will be holding a conference call on Tuesday, February 9, 2016, at 8:30 a.m. (ET) with analysts and investors to discuss its fourth quarter financial results.

CVS Health posted a solid third-quarter 2015 with revenues comfortably beating the Zacks Consensus Estimate. Gross new business wins for 2016, pegged at $13.3 billion, is spread across all client segments while net new business stands at $11.4 billion.

On Jan. 29, 2016, new research published by the CVS Health (CVS) Research Institute showed a significant improvement in adherence to specialty medications for patients enrolled in a pilot study evaluating Specialty Connect™, CVS Health’s innovative specialty prescription services program.

On Jan. 14, 2016, CVS Health announced it has entered into new clinical affiliations with four leading health care providers, John Muir Health in California; University of Chicago Medical Center in Illinois; Novant Health, serving the Winston-Salem area, in North Carolina; and University of Michigan Health System in Michigan.

Fundamental Analysis:

Ninestocks analyzes several different financial aspects: Growth, Profitability, solvency and efficiency.

Growth – Measures the growth of both the company’s income statement and cash flow.

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Profitability – Measures the historical price movement of the stock.

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Solvency – Measures the solvency of the company based on several ratios.

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Efficiency – Measures the strength and historic growth of a company’s return on invested capital.

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Conclusion:

CVS’s strengths can be seen in its better growth, , better profitability, great solvency and better efficiency. Technical indicators signal the bullish signs, as there is a bullish cross in MACD and Stochastic Oscillator. RSI is increasing to 55.48. The current P/E ratio indicates it is undervalued compared to the average P/E ratio of the industry and the sector. We rate CVS Health Corporation (CVS) a Strong BUY.