Although we don't believe in timing the market or panicking over market movements, we do like to keep an eye on big changes -- just in case they're material to our investing thesis.

What: Shares of Universal American (NYSE: UAM) surged a whopping 38% on the last day of the year after drugstore giant CVS Caremark (NYSE: CVS) agreed to purchase its Medicare Part D unit for roughly $1.25 billion.

So what: According to CVS President Per Lofberg, the acquisition makes CVS "a significant player in one of the nation's fastest-growing segments of the Pharmacy Benefit Management (PBM) industry," after two quarters of slumping PBM sales. Specifically, Medicare Part D is the subsidized prescription benefit program for beneficiaries who are 65 and older, so the deal is a natural way for CVS to play the aging boomer demographic, as well as the shift of retirees to Medicare.

Now what: There's nothing left for Universal American shareholders to do but celebrate. As part of the deal, CVS will acquire all of Universal American's outstanding stock and then distribute 100% of a newly formed public company -- which will have about $640 million of cash and no debt -- to the company's shareholders. Of course, for most of us Fools who weren't lucky enough to cash in on Universal American, rivals such as Humana (NYSE: HUM) and UnitedHealth (NYSE: UNH), which had similar price-to-cash-flow ratios prior to today's news, might be healthy bets, going forward.

Interested in more info on Universal American? Add it to your watchlist.

Fool contributor Brian Pacampara owns no position in any of the companies mentioned. UnitedHealth is a Motley Fool Inside Value and Stock Advisor pick. Motley Fool Options has recommended a diagonal call position on UnitedHealth, and Fool owns shares of it. Try any of our Foolish newsletter services free for 30 days.

We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Fool's disclosure policy always gets a perfect score.