This Top Blue Chip Just Went on Sale

Dear WallStreetZen Member,

This time, our Smart Leverage Alert centers on CVS Health (CVS). 

CVS Health is one of the largest names in American healthcare, spanning its pharmacies, its Caremark pharmacy-benefits arm, and its Aetna insurance business. It has quietly become one of the strongest turnaround stories in the sector … yet the market just handed patient buyers a better price than they had a month ago.

In its most recent quarter, reported August 5, CVS grew adjusted EPS to $2.58, crushing Wall Street's $1.85 estimate by roughly 40% and marking a 42% jump over the prior year. Earnings are now forecast to grow about 36% a year, well ahead of its industry and the broader market.

Here's what makes the timing interesting. CVS ran up near $110 by mid-July, then pulled back to around $95, down about 12% in a month. This isn't a stock nobody has noticed; it's up more than 35% over the past year. It's a quality name that just went on sale — and Wall Street agrees, with a Strong Buy consensus and an average target near $112, about 18% above today's price.

Our Zen Ratings model confirms the strength. CVS earns an A rating — a Strong Buy — landing in the top 5% of more than 4,400 stocks. It's the #3-ranked stock in the A-rated Healthcare Plan industry.

Looking at the Component Grades, CVS ranks in the top 13% for our AI factor, the top 10% for Sentiment, and the top 7% for Growth — a fast-growing, well-regarded business the market is only beginning to pay up for.

Our Logic

With Zen Options Essentials, we use "Smart Leverage" — Deep-In-The-Money options that let you control shares for a fraction of the cost, with your maximum risk strictly defined from day one.

The "Smart Leverage" Setup: (Ticker Name) Long Call

Given the strong fundamental case and the pullback that just improved the entry price on CVS, here's how we're structuring the trade using Smart Leverage — Deep-In-The-Money calls that move nearly dollar-for-dollar with the stock, but with strictly defined risk from day one.

Instead of committing about $9,491 to own 100 shares outright, a Deep-In-The-Money Call lets you control those same shares for about $2,043.

• The Play: $80 Strike Call (Expiring Feb 19, 2027)
• Delta: 0.8683 — Right in our sweet spot. This option moves nearly dollar-for-dollar with the stock. You get the upside with significantly less capital at risk.
• Intrinsic Value: ~86% — More than four-fifths of what you pay is real value, not time decay. This is what separates a Smart Leverage setup from the kind of speculative options trades that blow up amateur accounts.
• Leverage Multiple: 3.14x — Every dollar moves 3.1x harder than the stock, while the deep ITM strike still keeps meaningful downside protection versus a naked speculative call.
• The Target: For this position to double (+100%), CVS only needs to reach approximately $119.26 — a roughly 22% move in the stock that produces a 100% return on the option premium.

Why Options Over Shares?

A 22% move in CVS stock would be a solid return for shareholders. In this Deep-In-The-Money option, that same move has the potential to double your investment while putting only about $2,043 at risk instead of $9,491.

That's the power of Smart Leverage: stock-like upside with a fraction of the capital and strictly defined risk from day one.

What To Do Next?

CVS is just one of the setups our Zen Options Essentials TradeFinder identified this week.

And the best part? You don't need to spend hours doing research to find these trades. The TradeFinder does the heavy lifting — scanning for Deep-In-The-Money options with the optimal Delta, the right Intrinsic Value, and the right Leverage Multiple — so you can evaluate a trade like this in minutes.

How is that possible?

Because the best options trades aren't about picking exotic strategies or timing the market perfectly. They're about finding great stocks…and using Smart Leverage to control your risk while amplifying your upside.

EXACTLY what the Zen Ratings model is built to find.

EXACTLY what this methodology has been delivering.

If you'd like to see how this entire methodology works, start by watching our presentation, "Options Trading with the Zen Ratings." It walks through the Smart Leverage framework, the TradeFinder, and how we identify these opportunities step by step.

Options Trading with the Zen Ratings >

Or, perhaps you are ready to start using Smart Leverage by becoming a Zen Options Essentials member. Click below to join: 

Zen Options Essentials >

Happy Investing,

Mijusko Sibalic

Senior Writer, Zen Options Essentials

Want to get in touch? Email us at news@wallstreetzen.com.