Aetna (NYSE: AET) Archives - Market Mad House

Will CVS-Aetna Make Money?

The financial data indicates that CVS-Aetna will probably make money. For example, Aetna reported a gross profit of $4.5 billion on revenues of $15.561 billion for 2nd Quarter 2018.

In addition, CVS Health recorded a gross profit of $7.201 billion on revenues of $46.78 billion for 2nd Quarter 2018. Therefore, CVS-Aetna could generate a quarterly gross profit of $11.7 billion and quarterly revenues of $62.341 billion.

However, CVS Health recorded an operating loss of -$1.590 billion and a net loss of -$2.563 billion for 2nd Quarter 2018. Meanwhile, Aetna recorded an operating income of $1.684 billion and a net income of $1.212 billion for 2nd Quarter 2018.

Thus, cynics will argue that CVS is trying to cover its losses by buying Aetna. This argument is unconvincing because Aetna-CVS could make an operating income of $94 million and a net loss of -$1.351 billion.

Hence, CVS-Aetna will lose money with the financial numbers both companies reported on June 30, 2018. That makes CVS-Aetna a very dubious stock from a value investor’s standpoint.

Market Insanity

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Is CVS Health Making Money?

The idea is to create a private enterprise that functions something like Britain’s National Health Service (NHS). That is one stop shopping for all your health insurance and healthcare needs. The NHS operates hospitals and provides health insurance in the United Kingdom.

CVS is more like the NHS than many people think; it already operates more than 1,100 MinuteClinic walk-in healthcare facilities, for example. There are MinuteClinics in 33 states and the District of Columbia that have received more than 37 million visits.

Grocery Wars Market Insanity

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It is not Amazon that CVS Health is Afraid of

The real reason why CVS Health wants Aetna is to expand its vertically-integrated business model. Vertical integration means that one company controls as much of the production, financing, marketing, and distribution of a product or service as possible.

CVS Health is already partially vertically-integrated because it operates both drugstores and prescription-management plans. CVS operates clinics in some of its stores for the exact same reason. Buying a health insurance company would give CVS, even more, control over the process.

Grocery Wars

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Walgreen Boots Alliance Struggles to Survive

Medicare for All would be a boon for Walgreens by financing millions of new pharmacy customers and creating hundreds of thousands of new customers for its in-store clinics. That alone makes WBA a really good value investment to add to portfolios for the future but is it a value investment for the present.

Therefore a good wa

Long Ideas

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Aetna Dumps Obamacare, pays CEO $18.7 Million

Aetna (NYSE: AET) just demonstrated why Americans hate health insurance companies. The company revealed that it paid its CEO $18.7

The Death Spiral

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What Happens After Obamacare Collapses?

If that were to happen around 10 million Americans would find themselves in a nightmare situation. The Affordable Care Act requires them to have health insurance, yet there is no affordable health insurance available to them.