CVS Health Corp. (CVS, Financial)
COVID-19 has led to lower than expected revenues for CVS as they had fewer new therapy prescriptions due to a drop in physical meetings. However, earnings were up over 50%, primarily due to reduced costs from deferrals of elective procedures and other discretionary utilizations in the Health Care Benefits Segment. While COVID-19 has led to a lot of disruption in the industry, CEO Larry Merlo is using this disruption to accelerate their transformation into a much more integrated healthcare company. He said they are excited about the opportunity to demonstrate "the ability to deliver care to consumers in the community, in the home and in the palm of their hand." In the first six months of the year, CVS had over $10 billion in cash from operations, up over 40% year-over-year. CVS is also incredibly cheap, trading at under eight times earnings with free cash flow in excess of $9 billion.
From Jeff Auxier (Trades, Portfolio)'s Auxier Asset Management fall 2020 market commentary.
