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CVS is going to have a huge first quarter

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January 11, 2013 – Comments (1) | RELATED TICKERS: CVS

I'm going to keep this post short, but sweet.  This is an observation that I made while I was waiting for a prescription for my son at CVS.  I have never, ever seen a pharmacy as crowded in my life as CVS has been the three times that I've gone there over the past week or so.  I'm not talking about decent traffic, I'm talking about "Are they giving away free money here?" absolutely, annoyingly PACKED.  

My wife waited for an hour for a prescription the other night.  Of course this partially speaks to he poorly CVS stores are run, but more importantly they are making big money right now.

I didn't go to a ton of different locations, but the traffic at the one closest to my house has been truly mind-boggling.  There was lines all the way across the store for the Minute Clinic, for flu shots and for prescriptions.  I have a feeling that this flu season is going to be HUGE for CVS' earnings.

As someone who has written about the company extensively and used to own it, I have a feeling that I should have held onto if for a while longer.  The company has a ton of tailwinds, more people with healthcare, an aging population, rising sales of more profitable generic drugs, a larger customer base after the Express Scripts / Walgreens fiasco, etc...  Perhaps I should have heald onto my CVS stock for a little whie longer.  I just saw better catalysts and dividends elsewhere so I sold.  

The stock already seems to be moving over the past coupe of weeks. Keep an eye on this one.  I hope no one out there or any of their loved oes gets he flu.  That stuff is nasty.   

Have a great weekend everyone. 

Deej 

1 Comments – Post Your Own

#1) On January 14, 2013 at 9:00 PM, MKArch (99.71) wrote:

Deej,

CVS is one of the first stocks I ever bought probably back in the late 1990's. I didn't have a clue about how to evaluate stocks and I was just going by an analyst who mentioned it was a good way to play the aging baby boomers. I know it was under water for a while mostly went sideways and eventually sold it off out of boredom.

 I've kept it on my radar and something got me to take a peek at it recently. From what I remember it's about fair value based on M*'s analysis and I was thinking if got hit for some reason I'd like to get back in. I know you are not big on the market timing thing but I've overweighted home builders and financials to take advantage of the recovering U.S. economy and plan to take money off the table as we go from recovery to recovered. Then the plan is to redeploy to a companies like CVS where the long term catalyst is clear and finding companies with near term catalyst is slim pickings.

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