05. CVS Health Corporation (NYSE:CVS)
Number of Hedge Fund Holders: 60
CVS Health Corporation (NYSE:CVS) is a diversified healthcare company providing health solutions across the United States. It operates through three main segments: Health Care Benefits, Health Services, and Pharmacy & Consumer Wellness. With its expansive presence and integrated healthcare offerings, CVS Health Corporation (NYSE:CVS) is a robust player in the healthcare industry, making it a relevant inclusion in the list of the best hurricane and natural disaster stocks to buy. The company’s wide array of healthcare services and extensive retail presence position it well to respond to increased demand during natural disasters, where access to healthcare, medications, and essential supplies becomes critical.
In the second quarter of 2024,CVS Health Corporation (NYSE:CVS) beat analyst expectations by posting earnings per share (EPS) of $1.83 compared to an estimated $1.73. This performance highlights the company’s solid financial standing, supported by revenues of over $91 billion for the quarter and $8 billion in operating cash flow for the first half of 2024. Additionally, CVS Health Corporation (NYSE:CVS) has raised its full-year 2024 adjusted EPS guidance to a range of $6.40 to $6.55, reflecting its confidence in continued business strength despite challenges in certain segments.
CVS Health Corporation (NYSE:CVS) core business segments reported strong performance. The Health Services segment generated revenues of more than $42 billion and delivered $1.9 billion in adjusted operating income. The company also expanded its pharmacy market share to a record 27.2%. This growth is partly attributed to the successful launch of CVS CostVantage and the implementation of its biosimilar strategy, which delivered approximately $400 million in net savings for clients. Moreover, CVS Health Corporation (NYSE:CVS) focus on innovative pharmacy models and cost management strategies, like TrueCost, positions it well for long-term profitability.
The company also saw a rise in hedge fund interest, with 60 hedge funds holding stakes in CVS Health Corporation (NYSE:CVS) as of Q2 2024, compared to 54 in the previous quarter, indicating growing confidence from institutional investors. With strong fundamentals, increased market share, and a diversified business model, CVS Health Corporation (NYSE:CVS) is well-positioned to continue thriving and supporting communities during natural disasters, making it a compelling stock for investors seeking stability in uncertain times.
Ariel Global Fund stated the following regarding CVS Health Corporation (NYSE:CVS) in its Q2 2024 investor letter:
“American healthcare company, CVS Health Corporation (NYSE:CVS), also declined following disappointing earnings results and a subsequent reduction in full year guidance. The miss was primarily due to increased utilization of Medicare Advantage plans and weakness in the health services segment driven by the loss of a large client and continued pharmacy client price improvements. In response, management reiterated its focus on improving margins and enhancing its positioning in Medicare Advantage. CVS believes the program can remain an attractive business for Aetna and CVS Health over time and will construct its bid for 2025 as a multi-year repricing opportunity across plan level benefits. Meanwhile, CVS continues to return capital to shareholders through dividends and a recent accelerated share repurchase transaction.”
