Bargain Hunter beware, A value trap appears to be such a good deal that investors become confused when the stock fails to perform.
These "bargain" stocks may appear promising, but at the end of the day they are a big letdown for investors and they don't go anywhere.
Many seasoned investors and sell-side analysts wait until a catalyst gets ready to hit the market and buy or recommend the stock then. Once the catalysts evaporate or transpire they will jettison the stock.
As Walgreens new holding company WBA will be formed it may create two classes of stock, beware of voting rights and dividends in the 2 different stock classes, these may contain a special dividend or other special rights not granted to the average common shareholder.
With that much insider industry experience, you have that advantage and insight as to what will be unfolding over the next 3-5 years, but I bet you we get a couple of pops with all of the changes that are going on, and the perceptional benefit of all of the new ideas and approaches that are being applied to this situation…the value is there right now and the re-organizational pressure is being applied. I usually hold a position for 3-6 months, When it recovers in the short term, I can and will sell the pop…
That's when I'll vote that they sell ectstacy and medical marijuana on the same aisle as the booze. And then we'll take warning labels off of everything. I can see it all now.
Bankers and Investment firms are leaving Walgreens in the hands of Activist Investors.
Walgreens is undergoing management changes again, setting up a Holding corporation, dealing with restated projected earning, and developing a new business structure as it is being turned over to activists investors.
The Market is looking for a value investment and a new stock offering is on on the agenda alibaba.
As Alliance Boots will see slow European growth and Walgreens will be leveraging/adding Debt, the larger Investors are selling some stock until Walgreens finds out where it is headed.. this is showing in Volume movement.
A dog that is getting a flee bath.. I have bought and sold it, RAD needs to break out of its $1.00 trading range.
As for Walgreens they better start getting some better managers the stores are starting to look worn down.
That was my short public list, with 25+ years working in this sector and developed many of the payment/service structure changes and offerings, I can see right thought Walgreens plans and can fast forward to the next generation of changes that will occur in the drug store industry.
Jana is following Alliance Boots lead... they are good, but have no experience with this unique sector with they problems, also the USA Healthcare payment/services offering are different than Europe ,so it will be a slow learning curve for this new group.
As for Walgreens Management they have lost any edge that was developed and are stuck financially engineering growth.. this will not work in the long run(3 years) and Steffano P..Know this..
1 out of 25 is Underperform, ... the rest (24) are Hold or better
I reviewed your list, some elements have merit............I especially like #14, I view that one as a positive, exactly one of the things that was needed.....I think the list of worry is priced in at this point....company shakeup and activist investor activity changes public sentiment ...Ask Carl, he does pretty good with that approach....
Nope, just not a fan/Investor of Corporations that insulate themselves from the shareholder base, lose market share, sell off investors assets then give themselves large bonuses and announce that everything is ok.
It took over 100 years to build this company's trust in the Market place and less than 5yrs to lose it.
Investors are calling for Alliance Boots to run this company, many Investment analysts have reported so it shows that the Large Investors/Bankers no longer believe in this managements leadership.
Check out the Reuters article today.
Here is another idea, sell now and wait for a new executive chairman/ CEO of the Holding company (WAB)...This merger will be forced up into shareholders butts, as the cost for not completing this merger is in the billions and Walgreens Board knows nothing..
Walgreens now is be running behind CVS Heath, and soon more franchised pharmacies financed by the 3 Rx Wholesalers will be in the competition and lastly don't write off the PBM mail-order providers.
Walgreens had selected a management who went down the path of Sears, so it will be a slow walk into the history books.
" Grrrrrrrr, I'm in a Bear Trap, OH Nooooo"
Thanks for the ideas, that's exactly the kind of creative thinking that I was hoping for.;.;..that's what's going to be going on at the next Board Meeting.....
Back to the old highs in 3 months......
Boots can kick all the Butts they want.. it will not change the damage done over the last 5 years by Walgreens operational decisions by management..
Walgreens is a Value trap that will take years to come back to growth.. or they will move to franchise out the brand and build on the Wholesale direction that Alliance generates its largest revenue stream..
When that happens I would buy this POS, until then enjoy being in a bear trap.
"I'm glad to see more Boots people coming on board, I think everybody agrees that that's the better run and more innovative company," said Jeff Jonas, associated portfolio manager at Gabelli Funds, a Walgreen shareholder.
how can anyone be shorting WAG with the recent pullback and shakeup that is going on ????
This Board of Directors will get cleaned up and recover from here.......
She is back!!
Leslie Caldwell, the prosecutor who led the government's prosecution of Enron Corp., took over the Justice Department's Criminal Division in June, in the years before accounting blowups hit Enron and Worldcom Inc., she put together an accounting fraud case against executives from pharmaceuticals company McKesson Corp.
Now, about that Walgreens drug Diversion case(last year) and a CFO was recently resigned cost Investor 80 million dollars and billions in market Cap.. we may soon see a PERK walk for those executives who were responsible for allowing this to continue.
Some say Karma will eventual get you..
Board chairman for Walgreens Audit committee Mark Frissora, last week was dismissed as CEO of Hertz rental Cars ., Barry Rosenstein of Jana Partners recently was assigned to become a member of the Audit committee and given 2 other board seat selections, right after the Hertz announcement.
Jana Partners is a activist Investor and was a named participant in the Pais Inversion meetinng by IBD, that still has not been disclosed to SEC protected Main Street Investors.(LOL)
Jana, CEO Joined Walgreens Board of Director to unlock shareholders Value, but will soon find out that Walgreens has sold or contracted out several business units and may be facing a Value trap with his Investment.
EBITA inversion is off the Table unless he Knows more that the Congressional leaders, and projeccted growth drivers have not appeared after 2 years in developing the Alliance Books M&A announcement.
Mr. Rosenstein should you need help, just post onto this board I'm sure someone here will help you.
In the short term Walgreens is facing Risks and here is why
1) CFO resigned after accounting projection error of 1 Billion ...Wow
2) Walgreens will be Merging with a European Corporation with exchange rate risk.
3) Walgreens M&A needs Shareholder approval
4) Walgreens incurring new debt with refinancing for M&A debt.
5) limited experience by European operation managers Directing US operations.
6) Beta valuation higher than its peer group.
7) Operational decisions resulted in higher generic Drug costs.
8) Operation Cost increases.
9) Capital spending plans on hold.
10) Performance goals unmet
11) Industry shifting payment pressure
12) Cash flow shifting to outside funds or borrowings
13) Put on Rating Agency watch list.
14) Unexpected Activist Board member appointed with out shareholder vote
15) Confidence in Management and Board is in Question
Capital spending plans are based on financial projection which now are in question as the CFO resigned because of a 1.1 billion error.
Now is the time to forget about both of them and buy Rite Aid.
Rite is going up now