Walgreen Company (WAG): Why This Drugstore Stock Got Dragged Down

Page 2 of 2

Hedgie trade

Going into 2Q, CVS had a total of 46 hedge funds long the stock. The hedge fund with the largest position includes First Pacific, which had 4.4% of its 13F invested in the stock — or over $400 million (see First Pacific’s top picks).

Walgreen had 52 hedge funds long the stock, with Peter Rathjens, Bruce Clarke and John Campbell’s Arrowstreet Capital. Arrowstreet has a $84 million position in the stock (see Arrowstreet’s top stocks).

Meanwhile, Express had the most interest among the three socks, with 68 hedge funds long the company; this was a 16% decrease from the previous quarter. Of the major hedge funds, Brave Warrior Capital has the largest position, making up 12.2% of its 13F portfolio (see Brave Warrior’s new picks).

The bottom line

The pullback in Walgreen’s stock price brings its dividend yield to 2.5%. Meanwhile, the industry has big tailwinds related to the increase in the expected rise number of individuals with insurance coverage due to the healthcare reform. I still like CVS as the best bet given its revenue mix between PBM and retail. CVS also trades at 17.9 times earnings, compared to Walgreen’s 19.5 times.

Marshall Hargrave has no position in any stocks mentioned. The Motley Fool recommends Express Scripts. The Motley Fool owns shares of Express Scripts.

The article Why This Drugstore Stock Got Dragged Down originally appeared on Fool.com and is written by Marshall Hargrave.

Marshall is a member of The Motley Fool Blog Network — entries represent the personal opinion of the blogger and are not formally edited.

Copyright © 1995 – 2013 The Motley Fool, LLC. All rights reserved. The Motley Fool has a disclosure policy.

Page 2 of 2