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  • henleywm henleywm Jan 18, 2013 8:47 PM Flag

    If you bought CVS in 2007

    Since none of us have a time machine and can't go back to 2007 to invest, the question is, which company is better poised to make gains over the next 5 years? More recent history, as reflected in 6 month charts, suggest the street prefers WAG just now. That can change fast too. CVS is the safer bet as they continue down the path that has carried them to success the past few years, although I see the caremark division under assault from express scripts. The Walgreen case is less assured. The street likes that they will have easier comparisons in 2013 to year ago business without express scripts. The verdict will not be in for a while on their remake into a "health and wellness center". Likewise, their acquisition of Jakks Boots and plans to go global carry no guarantee of success. It seems clear that the market for traditional drugstores in the U.S. has limited expansion opportunities, so I agree with the concept of global expansion and trust the think tank at WAG to execute well. There are plenty of doubters with Europe in economic turmoil,but they seem to be turning the corner over their and Jakks Boots looks like a strong partner. My biggest concern with WAG is the way they have decimated many of their stores with aggressive cost cutting. They are now operating down at the level of CVS and RAD. Customer service is poor and a lot of talent has been lost. That will need to turn around.

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    • The problem is that there are many, many old time investors that are underwater with WAG
      The stock was a high flyer before the 2008 market crash as was CVS

      CVS has more than recovered from the bottom and keeps making new Highs (not spit adjusted).

      They are stealing market share and their acquisition of Caremark is turning out to be a game changer. Going forward CVS has positioned themselves to be the clear winner. All WAG can do now is copy their business model

      • 1 Reply to bozo2600
      • WAG has copied the CVS business model to the extent of cutting expenses to the bare bone, but their board is weighted with independent thinkers who will never copycat any model. WAG will never imo enter the PBM business again. New avenues of related health care business and international expansion is the WAG approach for now. The two companies will continue to compete in community pharmacy but they will continue to expand in different directions. While CVS expansion has been excellent the past few years, it is not clear to me where they go from here. Do they simply expand the PBM business? Mimic WAG by going into other areas of health care? Mimic WAG by expanding internationally? I suspect they will both be picking RAD's bones soon. RAD's recent surge into profitability is probably a short term phenomenon that won't be enough to save them. Obamacare will boost all pharmacies. I have a little CVS stock, a lot of WAG stock and a trading position in RAD. Clearly I lean toward WAG being the better market performer for the next few years, but I keep my eyes and ears open. That opinion can change.

        Sentiment: Buy

 
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