Wal-Mart and Walgreen’s: The Presciption Drug Battle
I believe Walgreen’s (WAG) is an excellent stock to put in your portfolio right now. Most investors are running away from CVS and Walgreen’s because of Wal Mart’s roll-out of their new $4 prescription drug program. This news sparked “The Herd” of Wall Street to oversell Walgreen’s. Because Wal Mart influences the economy in so many ways their $4 perscriptions scared many away from Walgreens (off about 15%). Walgreen’s drug stores are great as is their stock–yes they did miss earnings–but they are Best-of-Breed in their sector and that means there is a “Buy” opportunity. After Wal Mart announced the prescription drug program Walgreen’s addressed the Wal Mart prescription issue right away in their conference call. Walgreen’s knows that Wal Mart will only be providing 300 prescription drugs in their plan. They know that Walgreen’s pharmacy has 3,000 prescription drugs to sell. Walgreen management also knows their prescription price often is around $3-5 which can be lower than Wal-Mart. I think once investors realize these facts (some might have already) Walgreen’s they will regret dumping their Walgreen stock. Plus, WMT has not really received much of a price bump from their “great” news.
I am not sure that Walgreen is a short-term buy, but I plan on holding it for a while and watch it increase in value over time.
Written by Nagel on October 22nd, 2006 with 1 comment.
Read more articles on Stocks.