$CVS This is like an inverse bubble. It’s being valued as if Aetna doesn’t even exist. Here’s a comparison: Costco’s blowout Q3 reported $1.39B net income (+26% y/y) on $53B revenue. Market cap: $167B. CVS’s Q2 reported $2.98B net income (+53% y/y) on $65B revenue. Market cap: $77B. And that Q2 was during the height of the shutdowns! CVS is growing so fast and raking in so much money that it’s paying off the Aetna acquisition early. Once it deleverages, it will start directing even more of that cash flow to investors than it already does. If you’re long on CVS, take solace in the last shareholder presentation, which describes an omnichannel tech company rather than just a pharmacy. There’s no way CVS is slowing down, which means this is just about the safest stock on Wall Street.
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