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Walgreen Co. Message Board

  • investingzeus investingzeus Nov 4, 2003 9:53 AM Flag

    no doubt about it

    wag reports usual strong #'s. But so does cvs. So how is the expansion helping wag when cvs keeps rocking and rolling also? wag will suffer hangover from expansion while its comps grow.

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    • Exactly. He's too stupid to realize that when the options are exercised with a buy price of 4 or 5 dollars a share, it means they have been through at lease 3 splits. To get to that point, they had to be held for 10 years. These options were held up to the last minute, and then exercised before they became worthless. He's too stupid to understand the option concept.

    • >>wag reports usual strong #'s. But so does cvs. So how is the expansion helping wag when cvs keeps rocking and rolling also?<<

      Well, in the first place, it is not necessary that all other pharmacy chains must struggle for WAG to be successful. The pharmacy business is growing at a brisk pace and growing industries generally can support more than one successful business. In fact, there are several that are succeeding in this sector, including WAG, WMT and several PBMs. It's a good thing to be in a growing sector.

      But let's look more closely at CVS's numbers:

      >>Pharmacy same store sales increased 8.1%<<

      and WAG:

      >>comparable pharmacy sales rose 14.8 percent. Total prescriptions filled at comparable stores increased 7.8 percent.<<

      CVS does not give script counts. From the WAG numbers, we can infer that Rx inflation in October was 7.0% (14.8% SSS - 7.8% script counts). Applying that to CVS, we can infer that their script counts grew by 1.1% (8.1% SSS - 7.0%).

      So, on a comparable store basis, WAG had a 7.8% increase in script counts (customers) and CVS had only 1.1%. Some of that 7.8% and 1.1% may be due to the same customers taking more meds, not necessarily more customers in the door. In any event, it's clear that WAG stores brought in significantly more Rx customers than last year, while CVS barely increased script counts and probably saw no measurable increase in customer counts.

      Basically, WAG is showing real underlying growth while CVS is just riding the tide of increased prescription drug expenses for their existing customers.

      RAD, with a 6.8% increase in Rx SSS probably lost customers vs. last year.

      • 2 Replies to sleestack86
      • (((Well, in the first place, it is not necessary that all other pharmacy chains must struggle for WAG to be successful))))

        I think that is a change of tone. Wag longs do not sound their usual aggressiveness. This proves my past points, and I consider it an admission that wag IS NOT affecting its competeors ANY. No matter how much expansion goes on wags competeors will be successful also. Therefore wag expansion is a waste of resources, and if you do not believe it then consider this stock has not appreciated at all in over 5 years!

        ((((we can infer that Rx inflation in October was 7.0% (14.8% SSS - 7.8% script counts).))))

        Whats the big deal with inflation? All companies have to deal with it on an EQUAL BASIS.weather its 2% or 50%, inflation does NOT CHANGE the original. My point is that inflation effects all equally and the numbers are the numbers. Plus look at all the cash wag has been pouring into its expansion, and thats it? Also there was other numbers besides pharm to consider. Like FE for example. News say that numbers were very solid for cvs, and thats without all the cash infusion of wag. Building materials are high right now. In my educated opinion, wag will break into the 40'S but will not make it to the 50's next year. Remember who told ya.

      • A/O, great post. We are quite sure G/S will comment today or tomorrow, especially after those strong numbers. It is our opinion that they will focus on the combined two month total sales growth now at 17.1% If we hit 15% in November, that will take us to first quarter growth of 16.4%!! ..and a likelyhood of above consensus earnings per share. The stock in our opinion is a buy under $40.

    • Now as far as your predictions go, how do we handle these? Do we just dismiss all the ones you've made in the past, that you apologized for this week? You've never been right before, but have you changed the way you predict to the extent that we should pay attention to you now?

 
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