Barron's Believes that CVS (CVS), Henry Schein (HSIC), Western Union (WU), and Fiserv (FISV) are Good Plays in a Challenging Economy (PETM, MHS)
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Barron's highlighted several stocks that they see as good values in a down economy. The start out with CVS Caremark (NYSE: CVS).
CVS lost a little in November after their pharmacy-benefit management business didn't perform as well as investors had hoped it would, despite good results from the retail pharmacies nationwide.
Should CVS be able to repair their PBM business, it might get a higher P/E multiple. It could also separate off that segment if tepid results continue. CVS currently trades for about 11.2x profit estimates.
Fund managers that have a bullish first half of 2010 turning into a moderately bearish sentiment might like to look at the shares of Henry Schein (NASDAQ: HSIC), Western Union (NYSE: WU), and Fiserv (NASDAQ: FISV).
Fiserv provides IT solutions for the smaller regional banks. Though the financial segment of the market hasn't performed as investors had hoped last year, the smaller banks still need the technology to be able to compete with their bigger brothers. Fiserv generates a lot of cash as well, seeing about $668 million in 2009.
Henry Schein, who gets a good chunk of its revenue from supplying dental equipment. Despite a down economy, analysts still see the dental industry as recession proof, as people will still take care of their teeth.
As for Western Union, the article notes that it is a good play on global growth and immigration trends.
A manager of the T. Rowe Price New American Growth Fund likes Medico Health Solutions (NYSE: MHS), which, like CVS, is another pharmacy-benefit management business. The company is a major vendor of generic drugs, which may be a segment that can expand based on the number of patents scheduled to expire in the near future.
Finally, PetSmart (NASDAQ: PETM) is mentioned because of its wide selection of brands and the fact that its gaining share in the higher-margin private-label business.
CVS lost a little in November after their pharmacy-benefit management business didn't perform as well as investors had hoped it would, despite good results from the retail pharmacies nationwide.
Should CVS be able to repair their PBM business, it might get a higher P/E multiple. It could also separate off that segment if tepid results continue. CVS currently trades for about 11.2x profit estimates.
Fund managers that have a bullish first half of 2010 turning into a moderately bearish sentiment might like to look at the shares of Henry Schein (NASDAQ: HSIC), Western Union (NYSE: WU), and Fiserv (NASDAQ: FISV).
Fiserv provides IT solutions for the smaller regional banks. Though the financial segment of the market hasn't performed as investors had hoped last year, the smaller banks still need the technology to be able to compete with their bigger brothers. Fiserv generates a lot of cash as well, seeing about $668 million in 2009.
Henry Schein, who gets a good chunk of its revenue from supplying dental equipment. Despite a down economy, analysts still see the dental industry as recession proof, as people will still take care of their teeth.
As for Western Union, the article notes that it is a good play on global growth and immigration trends.
A manager of the T. Rowe Price New American Growth Fund likes Medico Health Solutions (NYSE: MHS), which, like CVS, is another pharmacy-benefit management business. The company is a major vendor of generic drugs, which may be a segment that can expand based on the number of patents scheduled to expire in the near future.
Finally, PetSmart (NASDAQ: PETM) is mentioned because of its wide selection of brands and the fact that its gaining share in the higher-margin private-label business.
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