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While an intriguing name given the relevance to the underlying industry, CVS Health (CVS) has been off to a frustrating run of performance recently. Since the beginning of this year, CVS stock has dipped 3.5%, a sharp contrast to the roughly 18% gain over the past 52 weeks. Currently, the Barchart Technical Opinion indicator rates shares as a Weak Sell, a consequence of the aforementioned technical slowdown. Still, there might be a contrarian play lurking here.
First, let’s consider the overall fundamental picture. As a business, CVS is no longer just a “corner drugstore.” Instead, it has evolved into an integrated healthcare ecosystem. Its Caremark pharmacy benefit manager (PBM) segment continues to show strong retention and customer conversions. Also, by combining the PBM unit with its primary care arm — known as Oak Street Health — and the insurance business (Aetna), CVS can capture profit at every leg of patient care.
