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Posts Tagged ‘CVS’

CVS has Blockbuster Quarterly Earnings – Subscribers up 55% YTD

CVS Caremark Corp.’s (NYSE: CVS) third-quarter profit rose 16% on a strong performance for the company’s pharmacy-benefits-management business, while the drugstore chain also struck a bullish tone about clients it gained after a dispute between two rivals.  Overall, CVS Caremark reported a third-quarter profit of $1.01 billion, or 79 cents a share, up from $868 million, or 65 cents a share, a year earlier. Excluding tax adjustments and other items, earnings rose to 85 cents from 70 cents. Revenue increased 13% to $30.23 billion.

Revenue in the larger pharmacy-services business soared 22% to $18.1 billion, aided by new clients added to the network during the 2012 PBM selling season, higher drug costs and growth in the Medicare Part D program.

CVS has an equity summary score of 9.8 out of 10 for a VERY Bullish outlook.  CVS has a dividend yield of 1.39%.

In the past 52 weeks, CVS shares are up 22.6%.  Subscribers to the Monthly Income Plan have a total return of 55% year to date by using a perpetual covered call strategy on CVS shares.

During the third quarter, CVS opened 45 new retail drugstores, closed 3 retail drugstores. Additionally, the company relocated 18 retail drugstores. At the end of the quarter, CVS operated 7,500 locations, which include 7,423 retail drugstores, 28 onsite pharmacies, 31 retail specialty pharmacy stores, 12 specialty mail order pharmacies and 6 mail order pharmacies in 44 states, as well as the District of Columbia and Puerto Rico.

Anticipating a benefit from the company’s accelerated share repurchase program (announced in September 2012) and its expectation about retaining at least 60% of the prescriptions gained from the Walgreen and Express Scripts impasse, the company is raising and narrowing its guidance for 2012. The company now expects adjusted EPS of $3.38−$3.41 (earlier guidance being $3.32−$3.38).

In comparison, shares of Express Scripts Holding Co. (NASDAQ: ESRX) were hit hard Tuesday in the wake of the pharmacy benefit manager calling analysts’ fiscal 2013 earnings projections “overly aggressive.”

Express Scripts dropped more than 12% to $55.15.

Late Monday, the company said a weak business climate and unemployment outlook would likely result in loss of some members, low use rates and higher demands from clients. Express Scripts didn’t offer a 2013 profit projection, saying only that it saw growth in two measures: earnings per share and earnings before interest, taxes, debt and amortization.

The company reported third-quarter results that came in slightly ahead of estimates on earnings, but fell below projections on sales. Net income for the period was $391.4 million, or 47 cents a share, compared with $324.7 million, or 66 cents a share, for the same period a year ago. Sales were $27 billion against last year’s $11.6 billion, due to its acquisition of Medco Health Solutions.

Bershire Hathaway Portfolio Update

As of 12/31/2011, Berkshire Hathaway (BRK.B) owns 34 stocks with a total value of $66.2 billion.  The classic value investor Warren Buffett made a number of stock moves during the 4th quarter of 2011.  These are the details of the buys and sells.

Added: CVS Caremark Corp. (CVS)

Warren Buffett added to his holdings in CVS Caremark Corp. by 25.53%. His purchase prices were between $32.97 and $41.16, with an estimated average price of $37.2. The impact to his portfolio due to this purchase was 0.09%. His holdings were 7,106,500 shares as of 12/31/2011.

Added: Intel Corp. (INTC)

Warren Buffett added to his holdings in Intel Corp. by 23.17%. His purchase prices were between $20.62 and $25.66, with an estimated average price of $23.87. The impact to his portfolio due to this purchase was 0.08%. His holdings were 11,495,000 shares as of 12/31/2011.

New Purchase: Davita Inc. (DVA)

Warren Buffett initiated holdings in Davita Inc. (DVA). His purchase prices were between $60.64 and $76.81, with an estimated average price of $71.05. The
impact to his portfolio due to this purchase was 0.31%. His holdings were 2,684,500 shares as of 12/31/2011.

New Purchase: Liberty Media Corp. Liberty Cap (LMCA)

Warren Buffett initiated holdings in Liberty Media Corp. Liberty Cap. His purchase prices were between $61.11 and $79.67, with an estimated average price of
$46.2. The impact to his portfolio due to this purchase was 0.2%. His holdings were 1,701,400 shares as of 12/31/2011.

Added: International Business Machines Corp (IBM)

Warren Buffett added to his holdings in International Business Machines Corp by 11.43%. His purchase prices were between $173.29 and $194.56, with an estimated average price of $184.45. The impact to his portfolio due to this purchase was 1.83%. His holdings were 63,905,931 shares as of 12/31/2011.

Added: The Directv Group Inc. (DTV)

Warren Buffett added to his holdings in The Directv Group Inc. by 378.85%. His purchase prices were between $40.6 and $47.87, with an estimated average price of $45.35. The impact to his portfolio due to this purchase was 1.03%. His holdings were 20,348,400 shares as of 12/31/2011.

Added: Wells Fargo & Company (WFC)

Warren Buffett added to his holdings in Wells Fargo & Company by 6.18%. His purchase prices were between $23.18 and $27.785, with an estimated average
price of $25.68. The impact to his portfolio due to this purchase was 0.93%. His holdings were 383,703,628 shares as of 12/31/2011.

Added: Visa Inc (V)

Warren Buffett added to his holdings in Visa Inc by 25.02%. His purchase prices were between $84.26 and $103.15, with an estimated average price of $93.81. The impact to his portfolio due to this purchase was 0.09%. His holdings were 2,865,008 shares as of 12/31/2011.

Added: General Dynamics Corp. (GD)

Warren Buffett added to his holdings in General Dynamics Corp. by 26.52%. His purchase prices were between $55.67 and $66.92, with an estimated average price of $63.53. The impact to his portfolio due to this purchase was 0.08%. His holdings were 3,877,122 shares as of 12/31/2011.

Added: Verisk Analytics Inc. (VRSK)

Warren Buffett added to his holdings in Verisk Analytics Inc. by 63.96%. His purchase prices were between $33.06 and $40.13, with an estimated average price of $36.75. The impact to his portfolio due to this purchase was 0.08%. His holdings were 3,445,029 shares as of 12/31/2011.

Reduced: Johnson & Johnson (JNJ)

Warren Buffett reduced to his holdings in Johnson & Johnson by 22.51%. His sale prices were between $61.27 and $66.02, with an estimated average price of
$63.97. The impact to his portfolio due to this sale was -0.91%. Warren Buffett still held 29,018,127 shares as of 12/31/2011.

Sold Out: Exxon Mobil Corp. (XOM)

Warren Buffett sold out his holdings in Exxon Mobil Corp.. His sale prices were between $71.15 and $85.28, with an estimated average price of $78.88.

List of Covered Call Trades for September 2011

 After two weeks of uncertainty and high volatility equities look as if they have found a short-term bottom.  For covered call traders, there are so many ideas available but the market still is not as stable as we would like it to be.   All of the improvement after Tuesday’s  reversal could be unwound if there is more negative news from Europe.  Our colleagues in Europe reminds us Italy is a huge debt problem and  since the European banks will need to raise capital, they will tighten lending,  especially interbank lending which may create liquidity issues.
As for last week’s volatility in the equity  markets, here is an appropriate quote from Samuel Brittan in last Thursdays  Financial Times. “The stock exchange always has been and always will be a  mixture of investment appraisal and sheer gambling.”  With this thought in mind, we still need to exercise caution with covered call trades.  The list below is primarily conservative stock trades with Coke, Exxon, Altria and General Mills.  The covered call trades will create monthly income while these stocks have nice dividend yields to add some income.
Covered Call Trades

Click to enlarge

The Coca-Cola Company (KO) is a non-alcoholic beverage company. The Company owns
or licenses and markets more than 500 non-alcoholic beverage brands, primarily
sparkling beverages but also a variety of still beverages such as waters,
enhanced waters, juices and juice drinks, ready-to-drink teas and coffees, and
energy and sports drinks. It also owns and markets non-alcoholic sparkling
beverage brands, including Diet Coke, Fanta and Sprite. It manufactures, markets
and sells, beverage concentrates, referred to as beverage bases, and syrups,
including fountain syrups (the concentrate business or concentrate operations),
and finished sparkling and still beverages (finished products business or
finished products operations).It operates in six segments: Eurasia and Africa,
Europe, Latin America, North America, Pacific, Bottling Investments and
Corporate. On October 2, 2010, it acquired the North American business of
Coca-Cola Enterprises Inc. (CCE).
Exxon Mobil Corporation (XOM) is a manufacturer and marketer of
commodity petrochemicals, including olefins, aromatics, polyethylene and
polypropylene plastics and a range of specialty products. It also has interests
in electric power generation facilities. It has many divisions and hundreds of
affiliates with names that include ExxonMobil, Exxon, Esso or Mobil. Divisions
and affiliated companies of ExxonMobil operate or market products in the United
States and other countries of the world. Their principal business is energy,
involving exploration for, and production of, crude oil and natural gas,
manufacture of petroleum products and transportation and sale of crude oil,
natural gas and petroleum products. On June 25, 2010, it acquired XTO Energy
Inc. by merging a wholly owned subsidiary of ExxonMobil with and into XTO. In
October 2010, Global Partners LP acquired retail gasoline stations from Exxon
Mobil. In June 2011, the Company acquired Phillips Resources.
CVS Caremark Corporation (CVS) is a pharmacy healthcare provider
in the United States. It provides pharmacy services through its pharmacy benefit
management (PBM) mail order and specialty pharmacy division, Caremark Pharmacy
Services; approximately 7,000 CVS/pharmacy retail stores; retail-based health
clinic subsidiary, MinuteClinic, and through its online pharmacy, CVS.com. It
has three segments: Pharmacy Services, Retail Pharmacy and Corporate. The
Pharmacy Services segment provides a range of pharmacy benefit management (PBM)
services, including mail order pharmacy services, specialty pharmacy services,
plan design and administration, formulary management and claims processing. As
of December 31, 2010, the Pharmacy Services segment operated 44 retail specialty
pharmacy stores. As of December 31, 2010, its Retail Pharmacy segment included
7,182 retail drugstores, of which 7,123 operated a pharmacy, which is its
CVS.com, and retail health care clinics.
Mylan Inc. and its subsidiaries (MYL) is a generic and specialty
pharmaceutical company, which provides products to customers in more than 150
countries and territories. The Company operates in two segments: Generics and
Specialty. Mylan is a fully-integrated global pharmaceutical company that
develops, licenses, manufactures, markets and distributes generic and branded
generic pharmaceuticals, specialty pharmaceuticals and active pharmaceutical
ingredients (API). In September 2010, Mylan completed the acquisition of 100% of
the outstanding equity in Bioniche Pharma Holdings Limited (Bioniche Pharma).
The United States sales are derived through the wholly owned subsidiary Mylan
Pharmaceuticals Inc. (MPI), its primary United States pharmaceutical research,
development, manufacturing, marketing and distribution subsidiary, as well as
through Mylan Institutional. Mylan Institutional. The specialty pharmaceutical
business is conducted through Dey Pharma, L.P.
General Mills, Inc. (GIS), is a global manufacturer and marketer
of consumer foods sold through retail stores. The Company is also a supplier of
branded and unbranded food products to the foodservice and commercial baking
industries. General Mills manufactures its products in 15 countries and markets
them in more than 100 countries. The Company’s businesses are organized into
three operating segments: U.S. Retail, International, and Bakeries and
Foodservice. Its product categories in the United States include ready-to-eat
cereals, refrigerated yogurt, ready-to-serve soup, dry dinners, shelf stable and
frozen vegetables, refrigerated and frozen dough products, dessert and baking
mixes, frozen pizza and pizza snacks, grain, fruit and savory snacks, and a
variety of organic products including soup, granola bars, and cereal. In July
2011, it acquired 51% controlling interest in Yoplait S.A.S.
Altria Group, Inc. (MO) is a holding company. As of December 31, 2010, Altria
Group, Inc.’s wholly owned subsidiaries included Philip Morris USA Inc. (PM
USA), which is engaged in the manufacture and sale of cigarettes and certain
smokeless products in the United States; UST LLC (UST), which through its
subsidiaries, is engaged in the manufacture and sale of smokeless products and
wine, and John Middleton Co. (Middleton), which is engaged in the manufacture
and sale of machine-made large cigars and pipe tobacco. Philip Morris Capital
Corporation (PMCC), another wholly owned subsidiary of Altria Group, Inc.,
maintains a portfolio of leveraged and direct finance leases. As of December 31,
2010, in addition, Altria Group, Inc. held a 27.1% economic and voting interest
in SABMiller plc (SABMiller). As of December 31, 2010, Altria Group, Inc.’s
segments included cigarettes, smokeless products, cigars, wine and financial
services.