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Strategies & Market Trends : Value Investing -- Ignore unavailable to you. Want to Upgrade?

To: Paul Senior who wrote (35839)	11/6/2009 1:19:41 AM
From: Spekulatius	Respond to of 78750

re CVS. CVS was a GAAP stock that seemed to have lost he "G" today. I skimmed through the CC transcript and the CEO seemed quite disorganized. Essentially they pulled the guidance for next years earnings. The PBM business is 40% of the gross profits and lost 4B$ in annual business for Y2010. The general manager for the PBM business has retired (=fired) and now they are looking for a new manager. they only have clarity on the retail side (60% of earnings) but not on the PBM side. Given my impression that the PBM business is falling apart and represents 40% of CVS earnings power, a 20% haircut for the stock seems justified. I don't see a reason to buy and if I owned the stock, I would not be a seller either (except to harvest a tax loss). While a 20% haircut seems overdone, this stock went up 15% (from 30$ to 36$) on no real news either, so it's a bit relative. siliconinvestor.com