CVS Health Corporation (CVS)

[mick]

READING $CVS/ [Valuation Analysis] Buy CVS before the Aetna acqusition is completed.

https://www.valuestocksblog.com/valuation-series/2018/1/13/valuation-analysis-buy-cvs-before-the-aetna-acqusition-is-completed



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January 13, 2018 Valuechaser
As discussed in the November 2017 portfolio update, I recently purchased two call options of CVS Health Corporation (Ticker: CVS, Exchange: NYSE), an American retail pharmacy and health care company.

Company Overview
CVS Health Corporation (“CVS”) mainly operates in two segments: Retail/Long-term Care Segment and Pharmacy Benefit Management.

o Retail/Long-term Care Segment
· CVS has the largest pharmacy store chain in the U.S. with approximately 23.8% share of the U.S. retail pharmacy market.

· CVS currently operates 9,709 retail pharmacies, online pharmacy websites and over 1,100 retail health care clinics.

· The pharmacy retail drugstores sell prescription drugs and a variety of over-the-counter and personal care products, cosmetics, etc.

· Long-term care (“LTC”) operations include the distribution of pharmaceuticals, related pharmacy consulting, etc.

· CVS serves about 5 million customers each day.

o Pharmacy Benefit Management
· CVS offers Pharmacy Benefit Management (“PBM”) to employers, insurance companies, unions, government employee groups, health plans, Medicare Part D plans, etc.

· Pharmacy Benefit Management includes developing and maintaining the formulary, contracting with pharmacies, negotiating discounts and rebates with drug manufacturers, and processing and paying prescription drug claims.

· In short, CVS provides services which helps its clients (notably government and insurance companies) reduce pharmacy costs.

· CVS filled or managed approximately 1.2 billion prescriptions in 2016 for nearly 90 million PBM Plan Members.