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Several Headwinds Pulled CVS Health Corporation (CVS) Down in Q2

Patient Capital Management, a value investing firm, released its “Patient Capital Opportunity Equity Strategy” second quarter 2024 investor letter. A copy of the letter can be downloaded here. During the quarter, the strategy returned -1.9% net of fees compared to the S&P 500’s 4.3% return. According to a three-factor performance attribution model, allocation and interaction effects led to the portfolio’s underperformance which was partially offset by selection effects. In addition, you can check the fund’s top 5 holdings to determine its best picks for 2024.

Patient Capital Opportunity Equity Strategy highlighted stocks like CVS Health Corporation (NYSE:CVS), in the second quarter 2024 investor letter. CVS Health Corporation (NYSE:CVS) is a US-based health solutions provider. The one-month return of CVS Health Corporation (NYSE:CVS) was -4.82%, and its shares lost 23.16% of their value over the last 52 weeks. On July 23, 2024, CVS Health Corporation (NYSE:CVS) stock closed at $57.97 per share with a market capitalization of $72.506 billion.

Patient Capital Opportunity Equity Strategy stated the following regarding CVS Health Corporation (NYSE:CVS) in its Q2 2024 investor letter:

“CVS Health Corporation (NYSE:CVS) declined in the period following a disappointing first quarter earnings announcement and cut to guidance. The company reduced full year EPS guidance by ~16%, almost entirely driven by higher-than-expected costs in Medicare Advantage. Skepticism remains on management’s ability to execute and move past these issues but given the magnitude of the stock reaction (~19% decline) we think the risks are more than priced in at these levels. The issues with Medicare Advantage are now known and the company is working to fix them. With time, we believe they will be corrected. We continue to think CVS has an attractive long-term opportunity with its unique combination of assets owning a healthcare benefits business (Aetna), a pharmacy-benefits manager (Caremark), an in-home evaluation business (Signify Health) and in-home primary care business (Oak Street Health) supporting the industry transition to a value-based care model. While the most recent missteps are disappointing, the company still only trades at 8x lowered earnings estimates while continuing to pay a dividend (5% yield) and execute its repurchase program (16% of shares outstanding).”

A row of shelves in a retail pharmacy, demonstrating the variety of drugs and over-the-counter products.

CVS Health Corporation (NYSE:CVS) is not on our list of 31 Most Popular Stocks Among Hedge Funds. As per our database, 54 hedge fund portfolios held CVS Health Corporation (NYSE:CVS) at the end of the first quarter which was 67 in the previous quarter. In the first quarter, CVS Health Corporation (NYSE:CVS) generated adjusted EPS of $1.31, which fell short of expectations. While we acknowledge the potential of CVS Health Corporation (NYSE:CVS) as an investment, our conviction lies in the belief that AI stocks hold greater promise for delivering higher returns, and doing so within a shorter timeframe. If you are looking for an AI stock that is as promising as NVIDIA but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.

In another article, we discussed CVS Health Corporation (NYSE:CVS) and shared ClearBridge Large Cap Value Strategy’s views on the company. In addition, please check out our hedge fund investor letters Q2 2024 page for more investor letters from hedge funds and other leading investors.

READ NEXT: Michael Burry Is Selling These Stocks and A New Dawn Is Coming to US Stocks.

Disclosure: None. This article is originally published at Insider Monkey.

AI Fire Sale: Insider Monkey’s #1 AI Stock Pick Is On A Steep Discount

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Here’s why this is the prime moment to jump on the AI bandwagon:

Exponential Growth on the Horizon: Forget linear growth – AI is poised for a hockey stick trajectory.

Imagine every sector, from healthcare to finance, infused with superhuman intelligence.

We’re talking disease prediction, hyper-personalized marketing, and automated logistics that streamline everything.

This isn’t a maybe – it’s an inevitability.

Early investors will be the ones positioned to ride the wave of this technological tsunami.

Ground Floor Opportunity: Remember the early days of the internet?

Those who saw the potential of tech giants back then are sitting pretty today.

AI is at a similar inflection point.

We’re not talking about established players – we’re talking about nimble startups with groundbreaking ideas and the potential to become the next Google or Amazon.

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Disruption is the New Name of the Game: Let’s face it, complacency breeds stagnation.

AI is the ultimate disruptor, and it’s shaking the foundations of traditional industries.

The companies that embrace AI will thrive, while the dinosaurs clinging to outdated methods will be left in the dust.

As an investor, you want to be on the side of the winners, and AI is the winning ticket.

The Talent Pool is Overflowing: The world’s brightest minds are flocking to AI.

From computer scientists to mathematicians, the next generation of innovators is pouring its energy into this field.

This influx of talent guarantees a constant stream of groundbreaking ideas and rapid advancements.

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China’s terrifying internet “Master Key”… and the one microcap that could stop them

In August 2024, news outlets around the world revealed one of the most shocking data breaches in recent history.

Approximately 2.9 billion records, including names, email addresses, phone numbers, mailing addresses, financial data and, distressingly, Social Security numbers, were stolen when Coral Springs, Florida, firm National Public Data (NPD) suffered a massive cyberattack. The company confirmed that the breach, which happened in December 2023, resulted in the potential leaks of data in the summer of 2024.

Nearly every day in the news, we hear about yet another damaging data breach or ransomware attack that puts valuable data — including yours — into the hands of hackers. And the number of attacks is soaring — up 30% year over year according to the latest numbers.

As bad as this is, it’s a day at the beach compared to what’s coming.

That’s because hostile nations across the globe — including Iran, North Korea, Russia and Communist China are going all-out to develop a breakthrough technology that will unlock what I call the “Master Key” to the Internet.

If they succeed in harnessing this groundbreaking “Master Key” technology, the consequences could be catastrophic.

Click to continue reading…