CVS - Earnings Implosion And Opaque Near-Term

The pharmaceutical supply chain cohort is simply unable to obtain firm footing in the backdrop consolidation within the sector, legislative backdrop, drug pricing pressures, rising insurance costs and a market that has lost patience with these stocks. All of these factors culminate into sub-par growth with a level of uncertainty as this sector continues to face headwinds from multiple directions. Many of the stocks that comprised this cohort presented compelling valuations in a very frothy market. CVS Health (CVS) was one stock that stood out as compelling value sitting, near multi-year lows in December of 2018. During the market rebound in January and February, CVS began to appreciate to new highs moving from $63 in mid-January to $70 in mid-February or an 11% move to the upside. Upon the release of its Q4 earnings, the narrative quickly changed as the transition to growth and Aneta integration is proving to be much slower than investors had anticipated, yielding an opaque situation near term for the stock. CVS has a healthy balance sheet and growing its dividend while seizing partnerships and acquisitions to propel growth into the future. It’s no secret that these companies have been faced with several headwinds that have negatively impacted the growth and the changing marketplace conditions have plagued these stocks. Regardless, until growth is restored and Aneta is fully integrated to yield a fully functional bumper-to-bumper healthcare colossus, the stock remains range bound. However, the long-term picture looks rewarding for value investors as growth initiatives and acquisitions bear fruit.

Market Challenges

The political backdrop has been a major headwind for the entire pharmaceutical supply chain (i.e., drug manufacturers, pharmaceutical wholesalers, and pharmacies/pharmacy benefit managers). Exacerbating the political climate, the drug pricing debate continues to rage on throughout political and social media circles weighing on the sector. This backdrop erodes pricing power and margins of drugs that ultimately move from drug manufacturers to patients with insurers and other middlemen playing roles in the supply chain web. Continue reading "CVS - Earnings Implosion And Opaque Near-Term"

Stocks Fall On Weak Jobs Report

Hello traders everywhere. The three major indexes fell Friday, on pace for their worst week since December, after data showed hiring growth slowed significantly in February. The declines came after data from the Labor Department showed U.S. nonfarm payrolls rose a seasonally adjusted 20,000 in February, missing economists' expectations of 180,000 new jobs.

Still, the report wasn't all doom and gloom. The unemployment rate ticked down to 3.8% from 4% a month earlier, while wages rose 3.4% from a year earlier, the strongest pace since April 2009.

Jobs Report

For the first time since December, all three indexes will post weekly losses over -2.6%. The DOW did finish last week with a slight loss of -.02%, the s&P 500 had a weekly loss of -.22% in January, but this will be the first weekly loss for NASDAQ, breaking a 10-week winning streak. Both the S&P 500 and NASDAQ issued green monthly Trade Triangles recent, but the DOW remains in a sideline position with a red monthly Trade Triangle. Continue reading "Stocks Fall On Weak Jobs Report"

Young And Promising Cannabis Security Stock

Cannabis is one of the most regulated industries in the world. Those regulations are helping the industry gain credibility and keeping consumers safe. However, these regulations are also creating unique security needs.

Canadian cannabis companies must comply with strict regulations on how to secure production facilities, inventories, and transport goods.

These strict security requirements are creating a big opportunity for a young and promising Canadian security company that specializes in providing security services to Canada’s largest cannabis companies.

3Sixty Security Corp (SAFE) is an early leader in Canada’s cannabis security industry.

This up-and-comer provides cannabis security consulting, guarding and secure transport security services to more than 500 customers and more than 60 licensed cannabis producers, including some of the world’s largest, such as licensed producers owned by Canopy Growth Corporation. Continue reading "Young And Promising Cannabis Security Stock"

Current Market Mood; Wait and See

Hello traders everywhere. The stock market has entered into wait and see territory with stocks falling for the third straight day after a positive open to trading on Monday morning. What are traders waiting for, the next set of clues in the U.S. - China trade talks?

Earlier this week, sources told CNBC that the U.S. and China were in the "final stages" of trade talks, with the two sides planning a Mar-a-Lago summit for the end of the month. U.S. Secretary of State Mike Pompeo also said Monday he thought Washington and Beijing were "on the cusp" of reaching a deal. So now, we wait and see.

Wait and See

The S&P 500 finally issued the new green monthly Trade Triangle that we've been waiting for at $2,813.49 in early trading Monday. However, that move higher was short lived as the S&P 500 closed lower for the day. But keep in mind that The S&P 500 has risen about 11% this year. That only leaves us with the DOW in a sidelines mode. Will we get that new monthly Trade Triangle soon or are in for a bit of a wait? Continue reading "Current Market Mood; Wait and See"

Should You Own ETFs In A "Stock Pickers Market"

Most Wall Street participants believe 2019 will be a “stock pickers” year; So how will that affect Exchange Traded Fund investors?

Well first off, what is a “Stock Pickers” market or year? That is a market in which to make a decent return; investors will need to pick individual stocks, not just buy the market as a whole or an index such as the S&P 500 or Dow Jones. At this point, most Wall Street analysts believe the major market indexes will end the higher just slightly higher. In mid-February, Goldman Sachs analyst posted a note indicating they think the S&P 500 will only climb to 3,000 by the end of the year, but the next few months could be flat.

Vanguard went a little further and said it believes the market will only return roughly 5% median annualized return over the next 10 years. Vanguard’s opinion paints an even worse picture than Goldman’s and hints at the idea that investors will need to be “stock pickers” for the next decade if they want to see returns greater than 5% annualized.

So, the experts are telling us that investors need to cherry pick individual stocks if they want to make a real-return greater than a few percent over the next year or maybe more. But what if they don’t know how to find and pick market-beating stocks, they need not worry because that is why actively managed ETFs where created. Continue reading "Should You Own ETFs In A "Stock Pickers Market""