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Activist Stock Investor Losing Patience with CVS



April 06, 2011 – Comments (0) | RELATED TICKERS: CVS

About a month ago I wrote a piece for my blog titled A disappointing investment that's poised to take off ( hot links on my MacBook).  It was about CVS and how it has the potential to be a solid investment going forward.

It looks like we can now add one more to the list of positives about the company, an angry activist investor. Relational Investors, the activist investor who just a few short days ago somehow convinced Texas Instruments (TI) to pay a 70-something percent premium for National Semiconductor, owns $700 million worth of stock in CVS Caremark.

Relational has an outstanding track record as an activist investor.  It has successfully convinced ITT to split itself up and Genzyme was recently bought out by Sanofi-Aventis.  

According to CNBC's Herb Greenberg, Relational's co-founder Ralph Whitworth is beginning to lose patience with CVS.  There is speculation that Relational may be pushing for the "outright sale" of CVS or possibly for the company to spin-off or sell its CareMark division and then circle the wagons at CVS maximizing its cash generating capabilities.

I for one welcome any change that Relational can instigate and I'm glad that I'm along for the ride...only 2% underwater right now and getting better by the day.

Greenberg: Activist Stock Investor Losing Patience with CVS


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