Summary
- CVS is working on expanding its physical store base, which seems strange in light of online competition. The good news is the pharmacy business is different than other retail industries.
- Modernization, cost-cutting, and efficiency, it all means the same thing.
- CVS getting back to normal should mean significant returns for patient investors.
The last few months may be a preview for CVS Health (NYSE:CVS) investors, at least for the short term. The company took a big risk acquiring Aetna, and so far, the market seems unconvinced about this tie-up. With the stock down more than 15% so far this year, some may be wondering if the shares are dead money. Truthfully, the shares are probably going to struggle over the next year, but after that, the future looks bright.
More stores?
In an age where it seems more and more sales occur online, it seems strange that a company would focus on physical stores. However, CVS knows the pharmacy business is a rare situation where physical stores can be a huge competitive advantage.
First, when it comes to prescriptions to treat a sudden illness, the advantage of online options all but disappears. When a prescription is called for, from the time the prescription is sent from a doctor's office, many times it is ready within 15 to 30 minutes. Same-day delivery gets a lot of press, but patients can't beat the speed of a prescription being filled before they even arrive at the pharmacy.
