The other day I scrounged up enough money to make another purchase. Cvs fell another $5 a share since my original purchase of them. The fundamentals are the same but recently there’s rumors of a acquisition. One that could really strengthen the company even more. I decided to add another 14 shares for a all in cost of 69.06 usd each.
Since I did a post with my last purchase 2 weeks ago I wont get into much details about cvs much. Check out the other post here
The stock has declined further on a report that amazon now has received pharmacy-wholesaler licenses in 12 u.s. states. It could also have something to do with the news that cvs is attempting to acquire Health Insurance Juggernaut Aetna for 66 billion. The price they are willing to pay seems high but dam if it go’s through cvs is really going to have some nice synergies and a great hold in the space.
I read a article the other day (sadly I cant find it) but it showed a couple companies that previously acquired health insurance companies. Those stocks have all returned some massive gains since the acquisition.
I like what cvs is doing, and approve the buy if it go’s through. The move by walgreens to takeover rite aid will move cvs into the 2nd biggest pharmacy chain now though. Although they say they would close down 600 rite aid’s which might help cvs as well.
In a market that is full of record high prices and extremely high p/e ratios, CVS seems like a screaming buy. If you are worried about amazon some analysts believe it would take amazon 10 years just to get 10% market share. This buy adds $28.00 in forward dividends to our portfolio and increases our average yield on cost.
What stocks are you currently watching or buying?
Hey I’m Rob, creator of Passive Canadian Income.
In 2011 me and my wife had almost $60,000 in debt and a negative $7,000 Net Worth. Through hard work and financial education we paid all that off. Now we are focusing on increasing our Passive Income Streams to make the money work for us. Feel Free to Follow along the Journey by clicking the Social Media links below or subscribing to get notified of new posts on the sidebar.