CVS Health Corporation (CVS) Stock: Is This Service Sector Stock Worth Your Investment?

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CVS Health Corporation (CVS) is climbing in the market today. The company, one that is focused on the service industry, is presently priced at $57.08 after climbing -0.57% so far in today’s session. As it relates to service companies, there are a number of factors that have the ability to cause gains in the market. One of the most common is news. Here are the most recent trending headlines relating to CVS:

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Mar-22-19 09:00AM Cannabis Stock News Daily Roundup March 21
08:57AM Biogen stock plunge shows ‘investment model in drug development is all wrong,’ says former Atena CEO
Mar-21-19 07:17PM Cramer Remix: Levi’s stock is too rich to buy after its high-flying IPO
07:00PM CVS CEO Larry Merlo: We are working to reduce medical cos…
06:38PM CVS Health CEO on reducing costs: Billions in value opportunity is ‘in front of us’

However, any time investors are making a decision with regard to investing, investors should take a look at much more than just news, this is especially the case in the ever incredibly complex service sector. Here’s what’s going on with CVS Health Corporation.

How CVS Has Been Trending

Although a move up in a single session, like the gain that we’re seeing from CVS Health Corporation may cause fear in some investors, a single session move alone shouldn’t be the reason for a decision to, or not to, invest in a stock. It’s generally a good idea to look at trends just a single trading session. In the case of CVS, below are the returns that investors have experienced:

  • Weekly – In the past 5 trading sessions, CVS has generated a change in price amounting to 2.72%.
  • Past 30 Days – The return on investment from CVS Health Corporation throughout the past month has been -10.62%.
  • Past 3 Months – In the past 3 months, the stock has generated a ROI that works out to -17.48%
  • Past Six Months – Over the last 6 months, investors have seen a change that works out to -26.98% from the company.
  • Year To Date – Since the the first trading session of this year CVS has resulted in a return on investment of -12.39%.
  • Annually – Finally, over the past full year, we have seen movement that works out to -8.80% out of CVS. Throughout this period, the stock has traded at a high of -30.52% and a low of 9.91%.

Important Ratios

Looking at a few ratios associated with a stock can provide prospective investors a look of how dangerous and/or potentially profitable a stock pick might be. Here are a few of the important ratios to consider when looking at CVS.

Short Ratio – The short ratio is a tool that’s used to measure the level of short interest. As the short ratio heads up, it means that more investors believe that the value of the stock is headed for the top. In general, strong service sector stocks can come with a lower short ratio. However, we also tend to see a lot of short squeezes in the sector. Nonetheless, when it comes to CVS Health Corporation, it’s short ratio is 1.14.

Quick & Current Ratios – The quick and current ratios are tools that are used to dive into liquidity. Basically, they measure whether or not a company can cover its debts as they mature with only quick assets or current assets. do have positive current and quick ratios. As it relates to CVS, the quick and current ratios work out to 0.70 and 1.00 respectively.  

Book To Share Value – The book to share value compares the book value of assets owned by the company to the share price. In this case, that ratio equates to 51.89.

Cash To Share Value – Finally, the cash to share value comparison compares the total amount of cash the company has on hand to the price of the company’s stock. In this case, the cash to share value ratio comes to 5.05.

What Are Big Money Players Doing With CVS Health Corporation

An interesting fact I’ve learned so far in my brief period as an intelligence is that smart money tends to follow big money. So, investors that are looking to keep their investments relatively safe will pay close attention to moves made by institutional investors as well as those on the inside. With that said, is big money interested when it comes to CVS? Here’s what’s going on:

Institutions own 84.10% of the company. Institutional interest has moved by 21.37% over the past three months. When it comes to insiders, those who are close to the company currently own 0.20% percent of CVS shares. Institutions have seen ownership changes of an accumulative -7.21% over the last three months.

Analyst Opinions Of CVS Health Corporation

Although it’s never a smart idea to avoid doing your due diligence and blindly following the opinions of analysts, it is a smart idea to consider their thoughts to validate your own opinions when it comes to making investment decisions in the service industry. Below are the recent moves that we have seen from analysts when it comes to CVS.

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Mar-13-19 Initiated Bernstein Outperform
Feb-20-19 Downgrade Wells Fargo Outperform → Market Perform $104 → $68
Jan-17-19 Initiated UBS Buy $75
Dec-18-18 Initiated Barclays Overweight $91
Nov-29-18 Resumed Goldman Neutral $87

Earnings

At the moment, analysts are expecting that throughout the full year, earnings per diluted share will come in at $7.29. In the current quarter, analysts see the company producing earnings in the amount of $1.51. Over the last 5 years, CVS has generated revenue in the amount of $8.90% with earnings coming in at -16.80%. On a quarter over quarter basis, earnings have seen movement of -126.50% and revenue has seen movement of 13.40%.

Looking At Share Counts

Traders seem to have a heavy interest in the counts of shares both available and outstanding. As it relates to CVS Health Corporation, there are currently 1.30B and there is a float of 1.29B. These numbers mean that out of the total of 1.30B shares of CVS currently in existence today, 1.29B are available to be traded by the public.

I also find it important to pay attention to the short percent. Think about it, when a large portion of the float is sold short, the overall feeling in the market is that the equity is going to lose value. When it comes to CVS, the percentage of the float that is currently being sold short sits at 1.15%. Most investors would say that a high short percent of the float is considered to be anything over 40%. However, I have seen that anything over 26% is generally a a play that could prove to be very risky.

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