Walgreen Company (WAG): Why Investors Should Not Give up on This Drug Retailer

Another smaller rival, Rite Aid Corporation (NYSE:RAD), continues to push its wellness store initiative forward to better serve local communities. Rite Aid is offering a special wellness65+ program to strengthen its relationship with seniors to ride the increasing aging trend. Rite Aid, which has just delivered three consecutive quarters of profits, continues to strengthen its financial position. It continues to carry out a well-defined strategy while gaining more financial leverage to support its turnaround. Rite Aid Corporation (NYSE:RAD) also expects to retain about 75% of those new scripts gained from the Walgreen-Express Scripts incident.

Bottom line

While Walgreen Company (NYSE:WAG) is slowly gaining back some of its lost customers from CVS Caremark and Rite Aid due to the Express Scripts Holding Company (NASDAQ:ESRX) dispute, the company is now stepping up with a stronger promotion and pricing strategy, as well as leveraging its Balanced Rewards program. In the near term, Walgreen will be facing margin issues; however, it is well positioned for long-term growth with its new partnerships.

With the upcoming landscape changes due to healthcare reform, Walgreen and CVS Caremark are well positioned to benefit from these policy changes. With the recent pullback, it is a good time to review and establish long-term positions for both Walgreen and CVS Caremark.

The article Why Investors Should Not Give up on This Drug Retailer originally appeared on Fool.com and is written by Nick Chiu.

Nick Chiu has no position in any stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. Nick 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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