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Bull’s Eye Report: CVS Caremark (CVS)

Sideways action in CVS has establish good support


At StateoftheMarkets.com, we strive to “own the best and ignore the rest” in our equity portfolios. Toward this end, each day we search our database for a “top stock” (a top rated company in terms of earnings strength as well as company and industry performance) that presents a strong technical “set up” and a good entry point.

In short, when our equity team is looking to add a stock to one of our portfolios, the “bull’s eye” stock shown below is generally their first choice.

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Company Symbol Industry Stock Rating YTD% Gain S.T.
Stop Loss
CVS Caremark Corp CVS Drug Retail 8.4 +3.36% $50.49

Why We Like The Stock:

CVS Caremark Corp. (NYSE:CVS) is our most compelling buy today due to the fact that it is a top rated stock (in terms of earnings strength and company/industry performance) that has maintained a positive technical set-up through this past week’s volatile period. Though a small sub-industry, Drug Retail has been a solid performer so far in 2013, evidenced by the Walgreen Co. (NYSE:WAG), Rite Aid (NYSE:RAD), and CVS Caremark. CVS has been trading sideways since the end of January, though through the sideways action has built a nice support base above $50. With the stock crossing above its short-term moving averages this morning, we think CVS is a promising hold as long as it stays above its 50-day moving average.

We Would Be Buyers:

At the current price (~$51.40), or on a pullback to $50.90.

Company Profile:

CVS Caremark Corporation, together with its subsidiaries, is a pharmacy health care provider in the United States. CVS Caremark provides pharmacy services through its pharmacy benefit management, mail order and specialty pharmacy division, CVS Caremark Pharmacy Services; approximately 7,300 CVS/pharmacy retail stores; retail-based health clinic subsidiary, MinuteClinic, and its online retail pharmacy, CVS.com. The company operates in three business segments: Pharmacy Services, Retail Pharmacy and Corporate. Its corporate segment provides management and administrative services to support the overall operations of the company. In April 2012, Health Net Inc.’s subsidiary, Health Net Life Insurance Company, sold its Medicare stand-alone Prescription Drug Plan business to a subsidiary of CVS Caremark. In February 2013, it bought Drogaria Onofre.

Stock Rating:

The Stock Rating indicates the combined score of our proprietary Earning Strength and Company Performance models. The rating scale is 0 – 10 with 10 being the highest.

CVS Caremark – Last Three Months

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CVS Caremark – Last 12 Months

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CVS Caremark – Last Five Years

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At the time of publication the editor and affiliated companies own the following positions: None

Note: Positions may be bought or sold while this publication is in circulation without notice.

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