Beer, wine, and spirits Goliath Constellation Brands (NYSE:STZ) surprised everyone with news last week that it's acquiring a nearly 10% stake in marijuana stock Canopy Growth (NASDAQOTH:TWMJF) for 245 million Canadian dollars. The investment positions Constellation Brands as a leader in suds and buds. Should you consider making this investment too?

In this episode of The Motley Fool's Industry Focus: Healthcare, analyst Kristine Harjes is joined by Todd Campbell to explain why Constellation is so interested in marijuana and what could be on tap next for shareholders. Also in this episode, the two reveal why CVS Health (NYSE:CVS) is eyeing Aetna (NYSE:AET), and how EXACT Sciences (NASDAQ:EXAS) is improving the odds of avoiding colon cancer -- the second most deadly cancer in the United States.

A full transcript follows the video.

This video was recorded on Nov. 1, 2017.

Kristine Harjes: Welcome to Industry Focus, the podcast that dives into a different sector of the stock market every day. It's Wednesday, November 1st. I'm your host, Kristine Harjes, and I have fool.com health contributor, Todd Campbell, on the phone. Todd, happy November! How was your Halloween?

Todd Campbell: Happy November to you, too! Last night was trick or treat up here in New Hampshire. I talked last week about how we were preparing for ghouls and goblins. I have to say, it was a success. We had a lot of kids and some fantastic Halloween costumes.

Harjes: Nice. What was the best one you saw?

Campbell: There were two girls who were dressed up identically, what movie was that, was that The Shining?

Harjes: Oh, you know I don't know movies. [laughs] 

Campbell: Anyways, it was two girls dressed up in very creepy garb, [laughs] and maybe our listeners can send me a note and tell me if that was The Shining or not. But, boy oh boy, I didn't sleep well last night after seeing that.

Harjes: Austin, is it The Shining? I feel like you would know.

Austin Morgan: I'm actually not positive on that one.

Harjes: Alright, to the listeners it goes.

Campbell: We'll have to crowdsource it.

Morgan: I haven't seen The Shining in a long time. I know what The Shining is about, but I can't remember if the two girls --

Harjes: It's the hotel one, right?

Morgan: Yes, redrum. Is that right?

Campbell: Yes.

Harjes: [laughs] Clearly, we need to brush up on our scary movies. Listeners, if you want to shoot us a note, as usual, it's industryfocus@fool.com. I'm sure every host that gets this email will be like, "What were they talking about on that show?" Anyway, make our day, send us a note. Today, getting onto healthcare business, it was an action-packed week last week. We're going to take you through three fairly different topics, all of the most important news from the past week or so in the healthcare world. First and foremost, this was probably the biggest piece of news, which is that CVS is rumored to be buying Aetna, a health insurer, for $66 billion in what will be the largest health insurance deal ever, which is pretty interesting. CVS is not a health insurer, it's a retail pharmacy and also a PBM, which is a pharmacy benefits manager. So, there's not a whole lot of overlap between these businesses, although there is some, and we will discuss it. But, in general, it would be a very vertical integration. Todd, what do you think?

Campbell: It's intriguing. Think about it, you're able to go out and buy your health insurance, and then be able to have that healthcare provider by the same parent company that you bought your health insurance from. And I'm sure we'll talk more about this, but listeners, CVS does have 1,100 MinuteClinics within their stores. So, they've shown a commitment to getting into the provider business. They also sell over the counter medicine, and they fill prescriptions. So, you have, basically, a vertically integrated business model, where you have the insurer -- and we didn't even talk about the PBM -- you have a pharmacy benefit manager, you have a healthcare provider, and then, potentially, you have the prescription fulfillment. So, there's a lot of intrigue to, that's a really interesting business model. The question would be, will it work?

Harjes: Right. I don't really see any synergies within this business model other than the obvious ones. Maybe they could consolidate their HR department, little things like that. But I think, you bring up a good point, which is that a lot of the intention behind this deal is to make a stickier, wider relationship with existing customers and with potentially new customers and members as well, where if somebody is coming to you for one service, you make it really easy and even incentivize them to also use you for another service like feeling your prescriptions, or maybe you're already getting your prescriptions from CVS and now you're going to stop by the front of the store. That's been something that's been going on forever. It's a similar strategy, when you think about extending that sort of, you're already doing this, so why don't we make it really easy for you to also put more money in my pockets by doing this? Extending that through the entire line of the healthcare system, which is also really smart. We talk a lot on the show about the costs of the healthcare system, and how expensive drugs are and why that is. And one of the key reasons behind drug prices being so high is, there are so many middlemen in between the drug maker and the person who actually consumes the medication. If you can consolidate a couple of players in that line, you could potentially result in a lot of cost savings, which is a very attractive thing to then be able to offer to the other players along the business line, those savings. Pass along a chunk, but you also get to keep that, too.

Campbell: Yeah. These are huge companies with, in CVS Health's case alone, $180 billion in trailing 12-month sales. $180 billion. Then, you look at Aetna, and that $62 billion. But they're also low margin businesses. I think CVS's trailing 12-month net income is only about $5 billion on that $180 billion, and I think Aetna's is $1.5 billion on the $62 billion on the trailing 12-month sales. So, these are low margin business. If you can even eke out 0.5-1% in the cost of providing care, theoretically this deal becomes even more attractive. I think that was what you were aiming at. I think, you're really talking about being able to provide the care to the health insurance members at cost, because you're not going to be charging a premium to the insurer that you own if someone goes to the MinuteClinic or gets a drug filled at your CVS Pharmacy. I think you can X out some costs there. And this is kind of the elephant in the room, you mentioned stickiness, I think that's a major concern across pharmacy retail right now -- how do we stay relevant in a marketplace that's moving increasingly away from bricks and mortar? And if Amazon (NASDAQ:AMZN), which you and I talked about on the show a few months back, if they go forward with plans to disrupt the market and provide direct-to-consumer prescription fulfillment or anything like that, stickiness is going to become paramount.

Harjes: Yeah, that's the elephant in this conversation. Of course, CVS is worried about Amazon. It's a retailer. Isn't every retailer worried about Amazon? CVS, for a while, I looked at them as an exception. There's a great article on fool.com about how CVS is Amazon-proof. But realistically, they're not. Nobody is Amazon-proof. Amazon is reportedly looking into selling their drugs online. This week, it came out that they had acquired a wholesale pharmacy license in at least 12 different states. They're reportedly developing their own PBM for internal use, which is a classic Amazon move, developing something for your own business in Amazon and then expanding it beyond just Amazon walls. And Amazon has a history in healthcare. It previously owned 40% of drugstore.com. So, this is not wild speculation, that Amazon could start to steal some of CVS's business.

Campbell: Right. There's obviously regulatory issues. There's a reason that there's a pharmacist involved, and people pick up their drugs. But, listen, mail order pharmacy is already a really big thing. So, theoretically, there's business models out there that Amazon could leverage to enter and disrupt this market. That's going to force companies like CVS to get innovative and figure out, how can we add value to the people who are coming into the stores? Is keep going to be through offering telehealth? Will it be helping with chronic disease management? What will it be? And I think that's one of the main reasons they moved into MinuteClinics so aggressively, because they recognized that, if you're sick, you're probably still going to have to go to somebody to get that care. Amazon won't necessarily be able to take care of that over the internet. Although, with telehealth, who knows, right? But, I think that's going to be one of the main impetuses for CVS being attracted to doing this deal. We should also recognize though that one of the major attractive features of Aetna is it's very heavily exposed to the Medicare market. And that is, perhaps, the best business for a health insurer to be in right now.

Harjes: Why is that, Todd?

Campbell: We you have 76 million baby boomers, and 10,000 turning 65 every day. As that happens, of course, they're going to be signing up for Medicare, because you have to sign up at 65 or your face penalties, regardless of when you start your Social Security. Public service announcement. So, you have this huge market to serve for both Medicare Advantage plans, which is considered part C, plans that are sold by Aetna. And you also have CVS showing some experience in that business, because they operate a company called SilverScript, which provides part D drug plans to Medicare recipients throughout the country. So, there's evidence to suggest that this is a direction that CVS has wanted to move into, i.e. SilverScript. Then, of course, there is this vertical integration. I'm trying to figure out whether or not this can be an accretive deal, and I really wonder. The devil is going to be in the details here, because this is not a small deal. $66 billion, over $200 a share is the rumored amount. And how are you going to finance that? Is it going to be all stock? Is it going to be debt? What is it?

Harjes: Exactly. I totally agree. This is my huge hang up with this deal. CVS does not really appear to be in a position to execute this in an accretive way any time soon. Actually, I'm reminded a little bit of the acquisition of Caremark back in 2007, because that acquisition, which was for $26 billion, was basically a merger of equals. And that, arguably, I think was a good move on CVS's part. And we knew going into 2017 that CVS's management has been talking about this year as a rebuilding year, and they were looking at acquisitions. All that makes me very hopeful that this is the right direction for the company. But I'm just so concerned that they don't have any good financing options. This is a company that already has some debt. It would be acquiring quite a bit of debt from Aetna. So, if they're going to take on more debt to make this acquisition to happen, that's not going to be very good for interest expense, that's not going to be good for their credit rating. Their other option, they could potentially do it via stock. I don't really see that being a good option, either. CVS's stock has not done very well lately. Meanwhile Aetna is a really expensive stock. They're trading at about 24X 2016 earnings. I don't know, I'm interested to see how CVS would want to finance this. Of course, these are just acquisition rumors right now, so we don't know those details. But I don't see a good path forward for them.

Campbell: I think the other investors have to recognize is, it's not a guarantee that this deal with even get approved if Aetna's board agreed to get acquired by CVS.

Harjes: Yeah. People on both sides of this table have had their mergers blocked recently. You have all the Walgreens and Rite Aid drama between what's been allowed to happen between that, which was supposed to be an enormous deal, and basically got cut down to just a shadow of what it used to be. Meanwhile, a merger between Aetna and Humana was also blocked recently.

Campbell: Right, and that was blocked because there was fear that the Medicare marketplace would get to consolidated in certain parts of the country, and they were just unable to figure out how to divest enough of the Medicare businesses to make that deal still make sense. So, of course, that got blocked. Now, theoretically, there's not a lot of overlap in these businesses, but regulators could take a look at SilverScript, CVS's part D program, and then look at Aetna's part D program and Medicare Advantage programs, which of course often times include drug coverage, and they could say, what will that do to competition in that market? Again, I think that's a major reason CVS wants to buy Aetna. So, if they're forced to divest parts of those businesses, I'm not sure whether or not it would still make as much sense to CVS to do this combination. So, I think investors are going to have to watch and see how this all plays out, because there are a lot of moving pieces here, and there's potentially a lot of risks associated with it. And, one of the other things we should understand, too, is that CVS Health shows up in a lot of portfolios because of this dividend. Well, if this deal isn't accretive right out of the way, what does that mean for future dividend increases? How will investors react to that? How much pressure will CVS shares go under, etc.?

Harjes: Yeah, I think that's a great point. They're currently yielding just under 3%. That's not insignificant. That could be one of the first things to go if they need the financing to make a deal like this happen. I don't know. I look at this and I actually don't really like what it says for CVS. This is a company that I went from being fairly bullish on, and now when I look at them having to stretch to potentially make this kind of deal just to stay afloat in the wake of Amazon and all the other competition, I'm personally not as interested in this stock as I once was.

Campbell: You know, I don't have an opinion necessarily. I don't own CVS right now, I don't own Aetna. I'm very interested to watch and see how this all plays out. I don't think I would go out and rush out to buy either of these stocks on this news, though.

Harjes: Yeah. One other potential thing for investors to think about is the fact that Aetna is actually trading well under the buyout price. They're around $170 per share right now. The buyout price, recall, is $200. So, twofold: if you think that Aetna's business is strong and it's a good stock, then it's a buy. If you think it's a buy, it's a buy. That's kind of dumb statement, but it's true. Or, if you think it's a good buy and you think this deal is going to go through, there is a fairly sizable arbitrage opportunity. But, that's assuming this does actually go through. We mentioned all the reasons why it might not, because the FTC could block it, or because CVS could decide, we actually can't make the financing work so we're going to drop it. It's just a rumor, after all. It's never good to buy stocks based solely on rumors, but it could be a good pickup, particularly if you think that Aetna is a strong business to own on its own merit. Also, on a different note, speaking of health insurance, I want to make the PSA that the Obamacare exchanges are open today as of November 1st. They'll be open only through December 15th, which is a smaller time window than normal. So, if you are somebody that needs to get health insurance through the exchanges, go do that as soon as possible. 

With that, we'll move on to our second topic of the day. Wow, we spent a while talking about our first topic and we have three total topics, so sorry, listeners, it looks like you're in for a long one. Second topic of the day, we're going to cover earnings of a company called EXACT Sciences. This was a company that was up about 10% yesterday because of some really strong earnings. This company makes a colon cancer diagnostic test. It's done at home, and essentially what it's trying to do here is eliminate the need for everybody to get a colonoscopy, and by everybody, I mean everybody that's supposed to get one, which is people between the ages of 50 and 74, you're supposed to be regularly getting colon cancer screening. But, a colonoscopy is no walk in the park. It's not something people like doing, and because of that there are a ton of people who should be getting screened regularly, and they aren't. And when you think about the fact that colon cancer is the second deadliest cancer, and it's very preventable if you catch it early, it's pretty frightening that only 62% of Americans that should get screened do so. So, in comes EXACT Sciences. They make something called the Cologuard. They're hoping to shake up the way that we screen for colon cancer.

Campbell: Colon cancer is the second-deadliest cancer. And one of the reasons it's so deadly is, too often, it's diagnosed in the later stages of the disease when it's harder to treat. The concept here is simple. Make it easier for people to get screened earlier so that you're catching it in the earlier stages when it's easier to treat. It's amazing, looking at these stats. You have 80 million people who fall within that screening guidelines, and you have over 20 million people who aren't up to date on the screening guideline. So, the potential market opportunity for EXACT Sciences pretty is massive. Now, this has been one of the favorite stocks for short sellers to hate. People have not believed this story for a number of different reasons, and I think we should probably spend a couple of seconds on why people wouldn't like the concept of EXACT Sciences Cologuard. Cologuard is a kit. You supply a sample at home, you mail it to EXACT Sciences, they evaluate it, and depending on how that test goes, you may or may not get recommended to go have a colonoscopy anyway. Colonoscopy has always been considered the gold standard of colon cancer screening. But, like you mentioned, the prep for it is significant, and it's not a lot of fun. Colonoscopies are also pretty expensive. They can cost thousands of dollars a year. So, people look at this and say, colonoscopies are still going to find most of the polyps that can turn into cancer, it's more sensitive, it's still the ideal screening mechanism. And you only have to do it once every 10 years. With Cologuard, you have to do it once every three years. So, you have to take these things into consideration. A lot of people felt that doctors would be hesitant to prescribe this. I think what they fail to understand is just how resistant some patients are to getting a colonoscopy, and how doctors will view that against the availability of a relatively simple test that can identify a lot of the risks in developing this dangerous disease. As a result, when EXACT Sciences puts up its quarterly numbers every quarter for the past year-and-a-half, they've surprised to the upside. Demand has outpaced, quarter after quarter after quarter, the expectations of industry watchers. And that's starting to translate into some pretty meaningful sales, Kristine.

Harjes: Yeah. You mentioned the short interest. I want to continue with that by talking a little bit about Citron Research, which has been in the news a bunch of because of their report about Shopify. This is a company that does a lot of shorting. It basically does the bear case for companies, and that's against them. Even given the fantastic story behind EXACT Sciences, and the way that you described it, Todd, it really does make a lot of sense why this company would be successful. It's the feeling a need in the market. But, Citron Research called EXACT Sciences "a poster child for what goes wrong when Wall Street gets ahold of a healthcare concept with no discrimination for whether it's good or bad medicine." They assigned it a short-term price target of $20 back in May, and that was about 40% below the price at the time. Today, the stock is around $55 or so. And in the medium to long-term, they basically said this is probably going to be either a single-digit stock or even go to zero. This is a very bearish report. And yet it continues to prove them wrong. More than 10,000 healthcare providers order their first Cologuard kit during the previous quarter, and 91,000 have ordered it since it was launched. The company had to increase their 2017 guidance. They were anticipating $230-240 million on 550,000 tests. They had to bump that up to $254-257 million on test volume of anywhere between 568,000-572,000. These are big numbers, and it's promising. And to me, this looks like a company that is on the verge of really breaking out.

Campbell: You threw some numbers out there, and we can even add a little bit of additional context to that. Think about, there's 91,000 physicians that have ordered a Cologuard test. That's up from 60,000 at the end of 2015. So, 50% more physicians have ordered a test from the third quarter to the end of the fourth quarter of last year. That's pretty remarkable. You're talking about $73 million in sales reported, $72.6 to be exact, for the third quarter. That's up 158% year over year. Really quite remarkable growth. And if you think about that guidance, the upped guidance that they gave, Kristine, you talked about going to $254 from $230 million at the low end in revenue from Q2 to Q3. They came in to 2017 thinking they're only going to do about $200 million. So, that guidance has been increased by 25%.

Harjes: Yeah, and a huge part of that is on volume, which is important. You can look at the per unit revenue, and that goes up and down a little bit. It was up in the past quarter, it now sits at about $451 revenue per test. But, that's half of the equation. The other half is the volume. Actually, there's even a third part, which is cost per test, and that's down. So, that's a very good thing.

Campbell: Yeah, cost per test fell to $129. Their goal is $125. Think about that, their average price for the test is $451, that's up 9%. Their cost of these tests is falling. And one of the big knocks against EXACT Sciences has been, when will this company turn a profit, because it's spending a ton of money on marketing and distribution. And I think, when you look at the size of this market and the fact that the trend in price is stable to up, the trend of costs is dropping, and more and more people are ordering the tests, to me, it feels like the profitability question is just a matter of time. Investments are being made now to penetrate the market. That's important. And that means, it may still be a while before they get in the black. But I feel like it's coming.

Harjes: Yeah, that's exactly what I meant when I said earlier that they're ready to break out. I think they are getting very close to profitability. Estimates have them having positive earnings in 2019. I think for the time being, the stock will probably have a pretty bumpy ride. But, overall, I think the bull case is pretty strong. The company believes it can capture about 30% of the entire colorectal screening market. And that should be annual revenue of about $4 billion. Compare that to the current market cap of $6.5 billion, and if you believe in the bull case, I think it could be a pretty profitable investment. But again, for the long term. Until they are consistently returning it profit, and they continue to get their expenses down, particularly as a percentage of revenue, and that metric is falling, they're still early stages.

Campbell: Yeah. And the caveat here is, this is an incredibly volatile stock. You could easily see this stock go up or down 10% on any given day. If you're buying it, you're buying it for that long-term opportunity to potentially target 30-40% of the 80 million people. You're not buying it with the idea that you're going to be perfect in any one three-month span.

Harjes: Yeah, absolutely. Let's move right along to our third and final topic of the day, where we're going to dig deeply into the Consumer Goods show's territory here, but it does have a healthcare tie-in. I asked Vince's permission, he said that we could talk about it. [laughs] This is Constellation Brands, which makes products like Corona, Modelo. It announced that it's buying just under a 10% stake in Canopy Growth, which is the world's largest publicly traded cannabis company. They provide medical marijuana to Canada, that's what they're known for as a business. Reportedly, Constellation is looking to make some cannabis infused drinks.

Campbell: This is a very, very interesting story. Up until now, everybody has said, marijuana has a lot of hype, I'm not really sure whether or not smart money is interested in it, a lot of these companies are being bootstrapped by family or small venture capital. This changes the game for the industry, because now you have an $8 billion revenue company that's a leader and beer, wine and spirits, willing to fork over nine figures just to get 10% of a company that I think is doing $13 million in Canadian per quarter. So, the price to sales in the premium that Constellation is having to pay to get that 10% stake is incredibly high. And I think what that's telling you is a few different things. Let's attack them. One thing that you mentioned is, would we end up with cannabis infused alcoholic beverages? I question that a little bit, only because sometimes alcohol and cannabis do not play nicely together, and I think we need to recognize that there could be some risks there. There could be some additional regulatory hurdles, that could expose some liability problems there. I don't know how that will play out. Maybe they'll come up with that, maybe they won't. I think this is more of a defensive move by Constellation Brands. They have a history of going out there and aggressively pursuing high growth sins where they look at and say, we're in spirits, beverages, beer and wine. When wine started to lose some of its momentum, they started gobbling up small craft breweries. For example, they bought Ballast Point, so they could get the Sculpin ale --

Harjes: Which is delicious, by the way.

Campbell: -- for $1 billion. Oh, it's wonderful. They also bought Funky Buddha, another one of those high-growth brands. And that's offsetting the decline in their wine business. So, they have these three areas of their business, and they're looking at it and saying, we have wine to offset beer, when one of those are doing well, we have spirits also mixed in there. But what happens if overall demand for alcohol falls? And some of the research out there suggests that as cannabis use increases, the use of alcohol declines. And I think the reason for that is, as I said previously, sometimes alcohol and marijuana don't play nicely with one another. So, I think they may be looking at it and saying, let's go out there, we'll buy a stake in Canopy, we have warrants now that we can increase the stake over time. We'll see how this does in Canada, because Canopy is a Canadian marijuana company. Still in the U.S., marijuana is not federally legal. Many states have approved marijuana, but it's not legal federally. So, Constellation won't be selling marijuana products from Canopy anytime soon in the U.S. However, up in Canada, there's already medical marijuana allowed, it's llegal throughout Canada. And in 2018, recreational marijuana is going to be allowed. It looks like, anyway. And if that happens, then you're talking about the first developed major market for both medical and recreational. Canopy is a huge player up there. Like you said, biggest market cap in the pure play marijuana space. They have some really big investments going on to boost capacity and increase distribution. They just started the Amazon of cannabis, a new online web portal that combines all of the brands and the things that they sell into one spot. They want to be able to theoretically open that up to smoke their competitors down the road and be able to serve consumers whatever it is they're looking for quickly and easily. So, I think, it's an interesting story. It's an expensive story. But, I think from Constellation's standpoint, it's a little bit of a defensive move.

Harjes: Yeah, for sure. I think the way that they're approaching it is pretty smart, where they're only making a relatively small investment in Canopy Growth for now. And the way that they're able to play this geographically is also pretty savvy. They should be able to get into Canada, as you mentioned, as soon as recreational marijuana becomes legal there, which is supposed to happen sometime next year. Constellation has said it will not sell in countries unless it's completely legal. So, all of the sudden, that opens up Canada as an option. If you look at what their CEO has said about legalization in the United States, it's pretty clear that they think it's highly likely that medical and recreational marijuana will be approved in the U.S., and they kind of imply that it will happen pretty soon. I do think that's a little bit too bullish of a prediction.

Campbell: Yeah, the current Administration makes me question that a little bit. I don't know, we've seen Jeff Sessions and some other comments about marijuana that make me want to tap the brakes a little bit on that kind of enthusiasm. But certainly, in the next five to 10 years, the landscape could look very different here in America. And this isn't even the only big country that these companies can penetrate. These companies are already working in Germany, which gives Constellation access to that market, as well.

Harjes: Absolutely. Then they would be able to tap into these other markets first and establish their business model, establish some best practices, bring them over to the U.S. in five or 10 years, however long it takes.

Campbell: Yeah. And Constellation has so much experience in dealing with regulated products and distribution. Think about it, that kind of experience can really accelerate the learning curve for Canopy. So, if Canopy is smart and listens to Constellation, it could really accelerate their ability to tap into these growth markets.

Harjes: Yeah. We've talked a lot about Constellation's side of things, but turning to Canopy's side of things, this is great news for Canopy Growth. This is basically an endorsement that, yeah, you are the best marijuana stock out there. Sands, the CEO of Constellation, he called out Canopy's management saying that these guys are a seasoned leadership team, they understand the legal, regulatory and economic landscape for an emerging market. Sands also went on to talk about how bullish he is on this market as a whole. If you're with him, this is a really great endorsement of Canopy Growth. I will say, Canopy is still so expensive as a stock. I'm very bullish on the business itself, I'm so hesitant about the stock just because it's trading at over 40X price to sales, which is absolutely astronomical. And pretty much every marijuana company out there is trading at equivalently insane valuations.

Campbell: Yeah. You have a company that is growing very quickly, so you have to take the price to sales metric with a little bit of grain of salt, because that's not usually forward-looking. But you have to look at it and say, they're growing very quickly, they're boosting their capacity, they're driving down their cost per kilogram, which is important. The other thing to keep in mind with this that's a little scary is, unlike beer, where you set a price and that price is pretty stable with the retail market and the distribution channel, throughout the distribution channel, the price of cannabis is pretty volatile. So, we're going to have to watch and see how that plays out. Because you can only control so much on the price. You can lower the cost, but if a price is dropping faster than you're saving money in costs, that can create some problems for the company further out as well. So, I think it's one to keep an eye on. It's an exciting, interesting growth story. But you're right, you have to pay up for that growth.

Harjes: Yeah, for sure. I will end it on that note. Thank you so much, Todd, for being with me today, as always. Folks, thanks for listening. As always, people on the program may have interests in the stocks they talk about, and The Motley Fool may have formal recommendations for or against, so don't buy or sell stocks based solely on what you hear. For Todd Campbell, I'm Kristine Harjes. Thanks for listening and Fool on!

John Mackey, CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool's board of directors. Kristine Harjes owns shares of Shopify. Todd Campbell owns shares of Amazon and Shopify. The Motley Fool owns shares of and recommends Amazon and Shopify. The Motley Fool recommends CVS Health. The Motley Fool has a disclosure policy.