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.

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