There are a lot of smart investors on Wall Street. It makes sense to watch and learn, and sometimes follow along for the ride. However, even smart investors make mistakes. So you need to step back and look at the risks and rewards when examining the trades they make. With that in mind, here are two stocks that look worthwhile and one that you might want to pass on (despite the big name that's backing it): Adobe Inc. (ADBE -2.74%), Franco-Nevada Corporation (FNV 0.99%), and CVS Health Corporation (CVS 0.98%).

A latecomer to the SaaS party

Brian Stoffel (Adobe Inc.): Ken Fisher is a billionaire investor with a stellar track record. At the end of last year, his Fisher Asset Management fund made a massive investment in multimedia software company Adobe. While the company still accounts for less than 1% of the fund's holdings (Fisher has over 500 stocks in the fund), his decision to triple his stake in Adobe is worth noting.

A woman drawing a risk versus reward graph.

Image source: Getty Images.

Adobe was a latecomer in the transition to the software-as-a-service (SaaS) business model. While other companies were migrating to the cloud, Adobe was selling expensive copies of its software to customers to be downloaded at home or work. Eventually the company caught onto the trend, but it took a while.

These days, however, the company is firing on all cylinders. The digital media division is the de facto system for use by designers, photographers, and animators. And the recent splash into e-commerce -- via the acquisitions of Marketo and Magento -- offer an interesting growth avenue in the years ahead.

I'm not invested in Adobe myself, but I've given it an outperform rating on my CAPS profile, and have been very impressed with management's ability to (finally) transition fully to the cloud. If you're looking for an SaaS play for your own portfolio, following Fisher's lead is a good start.

These giant banks are buying -- maybe you should, too

Reuben Gregg Brewer (Franco-Nevada Corporation): According to its most recent SEC filing, Deutsche Bank roughly doubled its position in gold streaming and royalty company Franco-Nevada. CIBC asset management increased its stake by nearly 80%. And TD Bank upped its holdings in the precious metals company by roughly a third. You might want to follow along for the ride.   

One of the big reasons to consider Franco-Nevada today is the stock market's high valuation in the face of ongoing headwinds, notably including slowing economic growth in key global markets. If investors start to panic, sending equity prices sharply lower, there will likely be a flight to safe haven investments like precious metals. Over 80% of Franco-Nevada's business is tied to commodities like gold and silver. 

GOLD EBITDA Margin (TTM) Chart

GOLD EBITDA Margin (TTM) data by YCharts.

But there's another reason to like Franco-Nevada: The streaming model is a better way to get exposure to precious metals than buying gold (which offers zero opportunity for growth) or a miner (where financial results can vary greatly with investment needs and commodity prices). Essentially, Franco-Nevada provides cash up front to miners in exchange for long-term contracts that lock in low prices for the commodities it buys. This helps ensure wide margins no matter what commodity prices are doing and helps explain why the company has been able to increase its dividend every year since its IPO.     

If you are worried about the market, adding a little Franco-Nevada to your portfolio can help provide some solace if the current upbeat mood takes a turn for the worse.

Check out the latest earnings call transcripts for Adobe, CVS Health, and other companies we cover.

A healthcare bargain?

Keith Speights (CVS Health Corporation): Leon Cooperman didn't become a billionaire by picking bad stocks. One stock that Cooperman obviously likes is CVS Health. Cooperman's Omega Advisors fund doubled the number of shares it owns in the pharmacy services giant in the fourth quarter of 2018.

Why might Cooperman like CVS Health? The stock trades at less than eight times expected earnings. CVS Health's dividend yields 3.6%. Wall Street analysts think the company can grow earnings by more than 8% annually over the next five years.

However, I'm not as big of a fan of CVS Health as Cooperman seems to be. The company reported lackluster numbers in its fourth-quarter update in February. CVS Health's Omnicare long-term-care pharmacy business continues to struggle, which resulted in the company writing off $6.1 billion last year. 

While I'm cautiously optimistic that CVS Health's acquisition of big health insurer Aetna will pay off, it's still early. There's a lot of work to be done in fully integrating Aetna's business into CVS Health to achieve the transformation that CEO Larry Merlo envisions. 

I also expect that the company's pharmacy benefits management (PBM) business could come under even heavier pressure. PBMs have taken a lot of flak lately for their role in high drug prices. 

Leon Cooperman might be right about CVS Health. But with the challenges the company faces, I'm concerned that it won't be able to deliver the level of growth that some expect it will. My view is that there are plenty of better stocks to buy right now than CVS Health.