Pills Are Good! Pills Are Good!


Do you like cheap drugs? I do! Apparently, so does Jeff Bezos. You know who doesn’t love cheap drugs? CVS, Walgreens, Rite Aid, Publix, Kroger, and any other brick and mortar drug store! Sad!


Amazon’s acquisition of PillPack is a proverbial game changer. I don’t know what this means for the long-term pricing power of prescription drugs. What I do know is that this acquisition is brilliant. Sick people need efficiency and competitive pricing more than anyone. Amazon has an opportunity to make their lives easier. I’m not an expert on big pharma, or the drug industry as a whole, but I know a good idea when I see one.


I’ve been skeptical of Amazon’s acquisitions in the past, but I’m not on this one. How accretive this will be to the bottom line is anybody’s guess, this may only serve as a massive disruption to an otherwise boring and slow-moving sector. Only time will tell.

Nevertheless, I’m intrigued by this move and you should be too. This doesn’t mean the average investor should go out and buy AMZN. This means that the average investor should take a quick peak under the hood of their ETFs and mutual funds to determine where their exposure is.


If you own a bunch of drug store stocks, you are probably sad, and that’s okay. They are not going to go out of business tomorrow. Stocks always react violently to unexpected news. As one of my favorite minds in the industry always says, “Risk happens slowly, and then all at once!” -Keith McCullough

You shouldn’t panic in situations like this. You need to understand what you own, especially if you are a DIY investor. This is a great opportunity to take a look at your holdings and your sector diversity to see if your funds are acting like they are supposed to.


If you just don’t care about short-term moves in the market or specific sectors, you are probably better off in the long run (as long as you don’t own a bunch of crap)! Emotional investors are typically bad investors. Can I get an AMEN?


Final thought: Mergers and acquisitions will sometimes be telegraphed and subject to government approval, and sometimes they will be out of the blue. The latter is where you can take advantage of arbitrage opportunities. How you do that is up to you, but the opportunities will not be ever present. Special note, if you don’t know what arbitrage is, you shouldn’t use your google findings to come up with actionable ideas right now.

Disclosures:

Any opinions are those of Alex Leonida and not necessarily those of Raymond James. All opinions are as of this date and are subject to change without notice.

8400 E. Prentice Ave.

Suite 1100

Greenwood Village, CO 80111-2926

T 303.629.7500

F 303.629.7560

info@CFGfinancialplanning.com

  • Grey Facebook Icon
  • Grey Twitter Icon
  • Grey LinkedIn Icon
  • Grey YouTube Icon
  • Grey RSS Icon
brokercheck_30.png

Raymond James financial advisors may only conduct business with residents of the states and/or jurisdictions for which they are properly registered. Therefore, a response to a request for information may be delayed. Please note that not all of the investments and services mentioned are available in every state. Investors outside of the United States are subject to securities and tax regulations within their applicable jurisdictions that are not addressed on this site. Contact your local Raymond James office for information and availability.

Links are being provided for information purposes only. Raymond James is not affiliated with and does not endorse, authorize or sponsor any of the listed websites or their respective sponsors. Raymond James is not responsible for the content of any website or the collection or use of information regarding any website's users and/or members.

© 2017 Securities offered through Raymond James Financial Services, Inc., Member FINRA / SIPC   |   Privacy Policy   |   Terms of Use

Investment advisory services offered through Capital Financial Group, Inc. Capital Financial Group, Inc. is not a registered broker/dealer and is independent of Raymond James Financial Services.

Form CRS

Investing involves risk and you may incur a profit or loss regardless of strategy selected. 

Investments & Wealth Institute ™ (The Institute) is the owner of the certification mark “CIMA” and “Certified Investment Management Analyst”. Use of
CIMA and/or Certified Investment Management Analyst signifies that the user has successfully completed The Institutes initial and ongoing credentialing
requirements for investment management professionals.


Certified Financial Planner Board of Standards Inc. owns the certification marks CFP®, CERTIFIED FINANCIAL PLANNER™, CFP® (with plaque design) and CFP®
(with flame design) in the U.S., which it awards to individuals who successfully complete CFP Board's initial and ongoing certification requirements.

*Refunds may be requested for initial financial planning/consulting services provided by Capital Financial Group only. These plans are not offered under Raymond James and no refunds would be provided by Raymond James. Additional fees may apply. Additional fees or investment losses are not available for reimbursement