Look for Opportunity in Walgreen Company (WAG)

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Other Players

In such scenarios, it looks tempting to avoid Walgreen and invest in stocks like Rite Aid Corporation (NYSE:RAD)CVS Caremark Corporation (NYSE:CVS) and Express Scripts, especially after the Walgreen – Express Scripts fiasco.

Rite Aid Corporation (NYSE:RAD) recently reported its results, with marginal increase in same store sales. It reported its highest profit margins in the last last 7 years. Moreover, its customer loyalty program and customer satisfaction levels ensures repeat customers. However, Rite Aid Corporation (NYSE:RAD) seems to have a cautious outlook, as it is planning to close down some stores and also remodel some.

CVS Caremark Corporation (NYSE:CVS), one of the fastest growing chains, opened 28 new stores in its last quarter and aims to open 150 new stores in 2013. It benefited the most from the Walgreen – Express Scripts fiasco in fiscal year 2012, and expects to continue benefiting from it. CVS Caremark Corporation (NYSE:CVS) seems to be banking on its Minute Clinic concept, wherein it shall have doctors to diagnose minor illnesses. However, this seems to be quite similar to the Take Care Clinics operated by Walgreen.

Bottom Line

Walgreen Company (NYSE:WAG) definitely seems to be lost in the pool of its own strategies, but it still is a market leader. It has an aggressive outlook, and is strategically sensible. Its prevention of advertising can also be cited as a cost control attempt, which proved wrong. However, given the resources, huge cash flow, synergies and the expertise held by its management, a few correct steps taken by Walgreen can bring it back in the game, and how. It can be opined to hold the stock if you’re already invested. Otherwise, it would be suggested to look for the good opportunities to enter a position in this stock, as Walgreen is strategically sound and reliable.

The article Look for Opportunity in Walgreen originally appeared on Fool.com and is written by Nidhika Goyal .

Nidhika Goyal has no position in any stocks mentioned. The Motley Fool recommends Express Scripts. The Motley Fool owns shares of Express Scripts. Nidhika is a member of The Motley Fool Blog Network — entries represent the personal opinion of the blogger and are not formally edited.

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