May 25, 2023
Top 10 Stock CVS Caremark Sell Recommendation
How to read the ranks
For every stock, we judge its performance against its peers and rank it on a scale of 1 to 100. The higher the rank, the better the stock performs than its peers. And, we do this for six investment strategies:
Value - shows how good of a value the stock is. Green is "inexpensive"; red is "expensive".
Growth - shows a company's growth potential. Green is "high growth" expected; red is "tough times ahead".
Safety - relates to the amount of debt a company has. Green is low debt level; red is high debt level.
Combined Financial - this isn't an average of the first three ranks but rather a consolidated view across several financial indicators. Green = good; red = tread carefully.
(NEW) Sentiment - quantifies professional analyst ratings and holdings as well as market pulse. Green = positive sentiment; red = skepticism (Only available to Premium Subscribers).
(NEW) 360° View - the ultimate rating with all financial and non-financial indicators.
Snapshot: CVS Caremark – Top 10 Stock in Employee Satisfaction Leaders in the United States
CVS Caremark is listed as a top 10 stock on May 25, 2023 in the market index Employee Focus US because of its high performance in at least one of the Obermatt investment strategies. Only the Obermatt Value Rank exhibits above-average performance, which means that the stock is seen as critical by the professional community and other financial facts are below average, conveying mixed investment signals. Based on the Obermatt 360° View of 23 (23% performer), Obermatt issues an overall sell recommendation for CVS Caremark on May 25, 2023.
Snapshot: Obermatt Ranks
| Country | USA |
| Industry | Health Care Services |
| Index | Dividends USA, Employee Focus US, Human Rights, S&P 500 |
| Size class | XX-Large |
When Obermatt identifies the Top 10 stocks in a market, it’s based on a certain investment strategy. The best performing stocks usually aren’t the ones that everyone is talking about (those are often "over-priced" and have low Value ranks).
For each investment strategy, we provide you with more detailed analysis and our recommendation. You see the ranks of the top 10 stocks ranked by that particular investment strategy (360° View, Sentiment, Value, Growth, Safety and Combined Financial Performance).
360° View: Obermatt 360° Assessment CVS Caremark Sell
| 360 METRICS | May 25, 2023 | |||||||
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| VALUE | ||||||||
| VALUE | 100 |
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| GROWTH | ||||||||
| GROWTH | 5 |
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| SAFETY | ||||||||
| SAFETY | 26 |
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| SENTIMENT | ||||||||
| SENTIMENT | 27 |
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| 360° VIEW | ||||||||
| 360° VIEW | 23 |
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ANALYSIS: With an Obermatt 360° View of 23 (better than 23% compared with alternatives), overall professional sentiment and engagement for the stock CVS Caremark are critical, mostly below average. The 360° View is based on consolidating four consolidated indicators, with three out of four indicators below average for CVS Caremark. Only the consolidated Value Rank has an attractive rank of 100, which means that the share price of CVS Caremark is on the lower side compared with typical size in indicators such as revenues, profits, and invested capital. This means that the stock price is lower than for 100% of alternative stocks in the same industry. All other consolidated ranks are below average. The consolidated Growth Rank has a low rank of 5, which means that the company exhibits below-average growth momentum when looking at financial metrics such as revenue, profit, and invested capital growth as well as stock returns. The consolidated Safety Rank has a riskier rank of 26, meaning the company has a riskier financing structure than 74% comparable companies when looking at the amount of its debt, its refinancing requirements, and its ability to service debt. Finally, professionals are more pessimistic about the stock than for 73% of alternative investment opportunities, reflected in the consolidated Sentiment Rank of 27. ...read more
RECOMMENDATION: With a 360° View of 23, CVS Caremark is worse than 77% of all alternative stock investment opportunities based on the Obermatt Method. This means that CVS Caremark shares are on the riskier side for investors. Only one of the consolidated Obermatt Ranks exhibits above-average performance, namely the Value Rank at a level of 100. All other ranks are below average, so proceed with caution. The company has below-average growth expectations (Growth Rank of 5), a riskier financing structure (Safety Rank of 26), and negative market sentiment in the professional investor community (Sentiment Rank of 27). This combination is sensitive to a crisis, because high debt levels (low safety) require growth to finance the debt burden. It’s no wonder that the investor community indicators are skeptical (low sentiment). Good value is sometimes an indication that the company's future is challenging. The below-par growth performance may be the reason for this assessment. We recommend evaluating whether the future of CVS Caremark is as challenging as the low price of the stock suggests. Since the professional community is pessimistic, you might need to worry about the future of CVS Caremark. Only invest if you have solid reasons to believe that the sluggish growth is temporary and the current market sentiment is an overreaction, possibly due to reputational issues in the past. ...read more
Sentiment Strategy: Professional Market Sentiment for CVS Caremark only reserved
ANALYSIS: With an Obermatt Sentiment Rank of 27 (better than 27% compared with alternatives), overall professional sentiment and engagement for the stock CVS Caremark is below industry average. The Sentiment Rank is based on consolidating four sentiment indicators, with half the indicators below and half above average for CVS Caremark. Analyst Opinions are at a rank of 41 (worse than 59% of alternative investments), which means that currently, stock research analysts tend to warn against investing in the stock of the company. Worse, Analyst Opinions Change has a rank of 16, which means that stock research experts are getting even more pessimistic. In addition, the Professional Investors rank is 33, which means that professional investors hold less stock in this company than in 67% of alternative investment opportunities. Pros tend to invest in other companies. The only positive sentiment indicator for CVS Caremark is Market Pulse, with a rank of 68, which means that the current professional news and professional social networks tend to be positive when discussing this company (more positive news than for 68% of competitors). ...read more
RECOMMENDATION: With an Obermatt Sentiment Rank of 27 (less encouraging than 73% compared with investment alternatives), CVS Caremark has a reputation among professional investors that is below that of its competitors. This is an ambiguous picture: analysts are negative and getting even more critical while the news in the market is positive. Who should investors believe? This is a difficult question in such a situation. Investors should proceed cautiously and verify not only the financial performance in the Obermatt Value, Growth and Safety Ranks but also independent news coverage of the company. ...read more
Value Strategy: CVS Caremark Stock Price Value at the top
ANALYSIS: With an Obermatt Value Rank of 100 (better than 100% compared with alternatives) for 2023, CVS Caremark shares are significantly less expensive than comparable stocks. The Value Rank is based on consolidating four value indicators that are all above average for CVS Caremark. Price-to-Sales has a value of 81 which means that the stock price compared with what market professionals expect for future sales is lower than for 81% of comparable companies, indicating a good value for CVS Caremark's revenue size. The same is valid for expected Price-to-Profits, more favorable than for 97% of alternatives, and this is also true for the Price-to-Book capital ratio (also referred to as market-to-book ratio) with a Price-to-Capital Rank of 82. Compared with other companies in the same industry, dividend yields of CVS Caremark are expected to be higher than for 98% of all competitors (a Dividend Yield rank of 98). ...read more
RECOMMENDATION: The overall picture with a consolidated Value Rank of 100, is a strong buy recommendation based on CVS Caremark's stock price compared with the company's operational size and dividend yields. Since all value metrics are above the industry average, there is no objection to investing in CVS Caremark based on its detailed value metrics.
Growth Strategy: CVS Caremark Growth Momentum negative
ANALYSIS: With an Obermatt Growth Rank of 5 (better than 5% compared with alternatives), CVS Caremark shows one of the most restricted growth dynamics in its industry. There is little momentum in this company. The Growth Rank is based on consolidating four value indicators, with all four metrics below average for CVS Caremark. Sales Growth has a rank of 4, which means that currently professionals expect the company to grow less than 96% of its competitors. The same is valid for Profit Growth, with a rank of 23, and Capital Growth with 26. In addition, Stock Returns have a below market rank of 21, which means that the stock returns have recently been below 79% of alternative investments. ...read more
RECOMMENDATION: The overall picture with a consolidated Value Rank of 5, is a SELL recommendation for growth and momentum investors. These are all bad growth momentum indicators. These are negative signals for investors interested in growth companies. Value is likely good for this company, as investors may have left this stock in the cold. If that is the case, investors should look at the company's prospects, especially Sentiment performance, because it may be a turnaround situation that could entail above-average returns in the future. But it remains a risky bet, as no growth signals are in the green zone yet. ...read more
Safety Strategy: CVS Caremark Debt Financing Safety below-average
| SAFETY METRICS | May 25, 2023 | |||||||
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| LEVERAGE | ||||||||
| LEVERAGE | 40 |
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| REFINANCING | ||||||||
| REFINANCING | 10 |
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| LIQUIDITY | ||||||||
| LIQUIDITY | 64 |
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| CONSOLIDATED RANK: SAFETY | ||||||||
| CONSOLIDATED RANK: SAFETY | 26 |
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ANALYSIS: With an Obermatt Safety Rank of 26 (better than 26% compared with alternatives), the company CVS Caremark has financing practices on the riskier side, which means that their overall debt burden is above the industry average. This doesn't mean that the business of CVS Caremark is also risky, it only means that the company is on the riskier side in respect to bankruptcy in case things turn sour, assuming that public reporting is correct. The Safety Rank is based on consolidating three financing indicators, with just one indicator above average for CVS Caremark. Liquidity is at 64, meaning the company generates more profit to service its debt than 64% of its competitors. This indicates that the company is safer when it comes to debt service. But Refinancing is riskier at a rank of 10, which means that the portion of the debt that is about to be refinanced is above average. It has more debt in the refinancing stage than 90% of its competitors. Leverage is also high at a rank of 40, which means that the company has an above-average debt-to-equity ratio. It has more debt than 60% of its competitors. ...read more
RECOMMENDATION: With an Obermatt Safety Rank of 26 (worse than 74% compared with alternatives), CVS Caremark has a financing structure that is riskier than that of its competitors. High Leverage (a low Obermatt Leverage Rank) is good in good times, because it usuallyl indicates that shareholders get higher returns. The good Liquidity performance of the company is an indicator that this is the case. However, if you expect an economic downturn, you may stay clear of this stock because they have an above-average debt level that needs refinancing soon. ...read more
Combined financial peformance: CVS Caremark Lowest Financial Performance
| COMBINED PERFORMANCE | May 25, 2023 | |||||||
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| VALUE | ||||||||
| VALUE | 100 |
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| GROWTH | ||||||||
| GROWTH | 5 |
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| SAFETY | ||||||||
| SAFETY | 64 |
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| COMBINED | ||||||||
| COMBINED | 23 |
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ANALYSIS: With an Obermatt Combined Rank of 23 (worse than 77% compared with investment alternatives), CVS Caremark (Health Care Services, USA) shares have lower financial characteristics compared with similar stocks. Shares of CVS Caremark are a good value (attractively priced) with a consolidated Obermatt Value Rank of 100 (better than 100% of alternatives) but show below-average growth (Growth Rank of 5), and are riskily financed (Safety Rank of 26), which means above-average debt burdens. ...read more
RECOMMENDATION: An Obermatt Combined Rank of 23, is a sell recommendation based on CVS Caremark's financial characteristics. As the company CVS Caremark's key financial metrics exhibit good value (Obermatt Value Rank of 100) but low growth (Obermatt Growth Rank of 5) and risky financing practices (Obermatt Safety Rank of 26), it may be a risky investment, because debt in times of crises can make things worse. The good value, better than 100% of comparable companies, may indicate the company's future is challenging. If you believe that low growth is temporary or just due to a specific current event, you may conclude that the good value of the stock provides an attractive investment opportunity. ...read more
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