cvs

Want to know if your stock is overpriced, maybe ready to take a breather? Then check its PEG. That's Price to Earnings to Growth, or the P/E ratio divided by the growth rate of a company's earnings. It's a quick and easy way to see if your stock may be ahead of its earnings power. It's also one measure a lot of momentum investors rely on as a screening tool.

If a stock's P/E ratio is well above its growth rate, they believe the stock is overpriced and won't touch it. But if the p/e ratio is well below the stock's growth rate, it could signal a bargain. It helps to know your stock's PEG.

I'm reiterating Buy ratings for giant drug store chains CVS-Caremark (NYSE: CVS) and Walgreen (NYSE: WAG) on likely increased store traffic, due to the H1N1 flu.

So far, the nation is doing fairly well at ensuring that there will be enough swine flu vaccine for key populations --those who could quickly spread the virus like teachers, health care workers, emergency personnel etc., as well as other risk groups -- pregnant women, people caring for infants, people aged 25-64 who are at high risk due to compromised immune systems.

If you are one of the investors out there watching General Motors stock each day trying to pick the perfect time to buy the stock... don't! For whatever reason, people have continued to buy General Motors stock, despite the fact that the company and the government have issued warnings that the stock is destined to be worthless.

I read an interesting article that reported yesterday there were 12.6 million shares of General Motors traded. Maybe people do not realize that the company went into bankruptcy, or maybe they are just trying to profit off of traders that are not aware that this is not new General Motors stock, but the volumes are a bit curious.

"Regardless of how you analyze the company, CVS Caremark (NYSE: CVS) stands out," says Chuck Carlson.

In The DRIP Investor, he explains, "Our Quadrix stock-rating system ranks more than 4,000 stocks based on more than 100 different variables. CVS scores better than 90% of the stocks in the Quadrix universe."

"CVS's Sector score -- that is, a score devised by evaluating the metrics that have the most influence over performance in that particular sector -- is also impressive at 95 out of a possible 100.

Do hang onto to those CVS Caremark Corporation (NYSE: CVS) shares, to say the least: I'm Reiterating my Buy rating for the company, first recommended on February 16, 2009 at a price of $27.30.

CVS, a classic defensive, is performing well, despite choppy macroeconomic conditions. Nothing has occurred within the last half-year to suggest that CVS will not be able to successfully incorporate recent acquisitions, and increase sales in key, new growth markets in the U.S.

Rite Aid (NYSE: RAD), which competes with Walgreen (NYSE: WAG), CVS Caremark (NYSE: CVS), and Wal-Mart (NYSE: WMT), saw a big increase in volume on Wednesday after it reported earnings for the first quarter. In fact, as Douglas McIntyre observed, shares of Rite Aid were up 5% at one point during yesterday's session. However, the shares ended up losing their green status by the close of trading. Rite Aid actually lost 3% when all was said and done. What does it all mean?

Well, Rite Aid did beat analyst forecasts by a wide margin. The call was for a loss of 13 cents per share. Rite Aid lost only 6 cents per share once adjustments are made. Revenues dipped a little over 1%, and same-store sales, after excluding the effect of the Brooks Eckerd acquisition, increased 1.5%. Interestingly, the mix of this increase is as follows: the pharmacy sales went up 3.1% on a comparable basis, and the non-pharmacy sales went down 1.4% on the same basis.

Walgreen (NYSE: WAG), a drugstore business that competes with CVS Caremark (NYSE: CVS) and Rite-Aid (NYSE: RAD), will be issuing results for the third quarter on Monday, June 22. According to Earnings.com, the analyst community is prescribing $0.56 per share for the company.

Of course, the question is: will Walgreen honor that prescription and fill it? I'd say it's quite possible. Last time around, Walgreen beat estimates. The call was for $0.66 per share in Q2. If you look at the press release from that time, you'll see that, once you adjust for some items, Walgreen went beyond expectations.

Analyst upgrades:

• Jefferies upgraded Quicksilver (NYSE: KWK) to Buy from Hold as it believes the company has many options to resolve its liquidity crisis. The firm expects shares to move towards its $10 NAV estimate and raised its target price to $10 from $7.
• Deutsche Bank upgraded Omnicom Group (NYSE: OMC) to Hold from Sell following the Q1 results as the company's margins are holding up better than previously thought. The firm raised its target price on shares to $31 from $21.
  
• Deutsche Bank also upgraded Universal Health (NYSE: UHS) following the company's better than expected Q1 results. Shares were lifted to Buy from Hold and the firm raised its target on the stock to $60 from $45.
• Barclays (NYSE: BCS) was raised to Buy from Reduce at Nomura.
  
• Orient-Express (NYSE: OEH) was lifted to Neutral from Underweight at JP Morgan.
  
• CVS Caremark (NYSE: CVS) was upgraded at Goldman to Conviction Buy from Buy.

I remember Toronto during SARS. As one of the harder hit areas, it was not a happy place. It was the end of winter, but that miserable, cold winter just didn't want to end. People walked the streets in a gloomy haze, afraid to take the subway and giving dirty looks to anyone brazen enough to cough in public. Worse, I couldn't even visit a friend in the hospital. All things considered though, in global pandemic terms, it was over relatively quickly. Let's hope swine flu will be the same.

In the meantime, let's put on our investors hats and see what's in store for some stocks:

Travel and tourist stocks
This is one of the worst hit areas, especially airlines, as people may cancel their travel plans. For example, AMR Corp. (NYSE: AMR) traded over 9 percent lower an hour after the open. Royal Caribbean Cruises (NYSE: RCL) was down over 15 percent. In fact UBS downgraded these airlines and hotels this morning: AMR, Continental Airlines (NYSE: CAL), Host Hotels and Resorts (NYSE: HST), Lasalle Hotel Properties (NYSE: LHO), Marriott (NYSE: MAR), United Airlines (NASDAQ: UAUA), US Airways (NYSE: LCC). Carnival Cruise Lines (NYSE: CCL) also declined considerably. Best to stay away from the sector.

TheStreet.com's Jim Cramer is seeing signs of a coming boom, but he's still being cautious here.

If you had to define the early cycle, if you had to outline what stocks should be soaring coming out of a recession into a boom and which ones should be faltering, you would have to say the action in this market in the last month is the quintessential behavioral pattern.

What are the components of the early cycle? First, it's the homebuilders. As is typical coming out of a recession, the stocks precede the bottom of housing. That's exactly what's happening with the lowest permits and highest affordability and best mortgage rates and massive inventory. Everywhere, except on Wall Street reporting, the bottom is bursting out. When you read the lead story in the Sunday Philadelphia Inquirer, and it is all about the thousands of prospective homebuyers heading south to pick up condos and homes for half of what they were worth two years ago -- or even less -- and you know that virtually no one has broken ground in the Sunshine State in a year, you can bet that the bottom's actually behind us. This housing market has wiped out all but the most stable private builders and even the public ones are merging as we know from Pulte (NYSE: PHM) (Cramer's Take) and Centex (NYSE: CTX) (Cramer's Take). So, in the next cycle, you can see some profitability developing year over year even though the new homes don't have much margin because the foreclosed homes next door are going for a song. And don't believe this won't change the dynamic of future foreclosures. In most areas, rent is higher than the interest on mortgages, so you will find that second or third job needed to stay in your home. The incentive structure's radically different than a year ago.

Here are some highlights from this past week's earnings coverage from BloggingStocks:

• Apollo Group Inc. (NASDAQ: APOL) reported that Q4 revenue soared despite the recession.
• Baidu Inc. (NASDAQ: BIDU) posted strong annual revenue, but at a slowing growth rate.
• Career Education Corp. (NASDAQ: CECO) easily topped Q4 earnings expectations, lifting shares up.
• Comcast Corp. (NASDAQ: CMCSA) Q4 earnings beat expectations and it increased its dividend.
• CVS Caremark Corp. (NYSE: CVS) shares jumped after it reported higher earnings in Q4.
• Digital River Inc. (NASDAQ: DRIV) shares soared on better-than-expected Q4 earnings and revenue.
• Expedia Inc. (NASDAQ: EXPE) reported dismal results due to a huge good will write down.
• Goodyear Tire & Rubber Co. (NYSE: GT) posted a greater-than-expected Q4 net loss and announced job cuts.
• Hormel Foods Corp. (NYSE: HRL) exceeded Q1 earnings expectations due to the popularity of SPAM.

CVS Caremark Corporation (NYSE: CVS) is enjoying a 6% jump higher today on the heels of this morning's earnings report. The pharmaceutical retailer banked $935 million (65 cents per share) during the fourth-quarter reporting period. This is up nearly 17% from earnings in the year-earlier period.

5 Stocks That Benefit From Others' Losses
These companies could gain from the financial misery of its peers. They include Best Buy, Barnes & Noble, Staples, Intel and Tiffany & Co.
http://www.smartmoney.com/Investing/Stocks/5-Stocks-That-Benefit-From-Others-Losses/

U.S. stock futures were higher Thursday morning, pointing to a stronger start on Wall Street as investors continued to focus on the economy. Before the bell: Futures point to higher start ahead of economic data

Hewlett-Packard Corp. (NYSE: HPQ), reported a 13% quarterly drop in earnings as sales ticked up just 1% due to the recession. Results were inline with estimates, and even though it cut its 2009 guidance, it was still in line with Wall Street's expectations. HPQ shares declined 3.4% in premarket trade.

Sprint Nextel Corp (NYSE: S) posted a $1.6 billion, or 57 cents per share quarterly loss on Thursday and said a total of 1.3 million wireless customers had left its service during the quarter. Revenue fell to $8.4 billion from $9.8 billion a year earlier, and topped the Street's estimate. Sprint expects subscriber losses to improve in 2009. Sprint shares are soaring some 6.6% in premarket trading.

Economic times are tough, and people are skimping on pricey outings, gourmet meals, and new purchases. There's one activity, however, which is relatively free of charge, entertaining, and accessible in one's own home. Perhaps the word "recession" is an aphrodisiac, or maybe people simply have more time on their hands. Either way, many may be leery about expanding the family at this time, so condom sales have been on the rise.

With other retail sales slipping across the board, condom sales jumped up 5% in the fourth quarter of 2008 and 6% in January, compared with the same time periods during the previous years, according to the Nielsen Company.