"When the FTC blocked the Walgreens-Rite Aid merger, they actually laid the groundwork for less competition, because the delay and subsequent confusion ending up crushing Rite Aid," the Mad Money host said. "They thought they were preventing the industry from becoming an effective duopoly, instead they turned it into one. And the biggest winner here is CVS: it's a best-of-breed stock with a lot more room to run."
Walgreens announced its acquisition of Rite Aid in 2015, but it became clear in the following year that the Federal Trade Commission had its concerns about the deal for anti-trust reasons. Instead, Walgreens settled for buying almost 2,000 Rite Aid stores.
Rite Aid then tried to sell itself to Albertsons, but that deal went up in smoke last week.
In the meantime, CVS has become the most vertically integrated drugstore chain, and its acquisition of insurance provider Aetna will only increase its clout in the healthcare industry.