Excited… Synergy… CVS/Caremark

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“My apologies for the silence over the last month, but I am in the final stages of completing my book and there is just not enough time in the day to juggle investing, teaching, book writing and coming up with insights worth sharing.

I am trying to make up my mind about the CVS (CVS) – Caremark (CMX) deal. So far I have more questions than answers. In general I am not crazy about acquisitions of this magnitude as the integration risk is too high. But I am giving CVS the benefit of the doubt, at least for now, as it has done a great job with acquisitions in the past.  (A factoid from the CVS/Caremark conference call: Management mentioned “excited” nine times, “synergy” six times.)

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Vitaliy N. Katsenelson, CFA, is Chief Investment Officer at Investment Management Associates in Denver, Colo. He is the author of Active Value Investing (Wiley) and The Little Book of Sideways Markets (Wiley). His books were translated into eight languages. Forbes Magazine called him "The new Benjamin Graham".

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