Will Walgreen Company (WAG) Resist the Pressure?

Walgreen Company (NYSE:WAG) is trading around the value of $63.4 per share and hasn’t come back up after the stock price plummeted in August. CNBC’s Jim Cramer and David Faber discussed shortly the faith of the company and some of its opportunities.

Walgreen Company (NYSE:WAG)

As a drug retail chain, Walgreen Company (NYSE:WAG) emerged only after a series of major enhances. The company went from a little more than 4,000 stores in 2003 to 7,000 in 2009, being able to open stores at intervals close to 17 hours. However, with Amazon.com, Inc. (NASDAQ:AMZN) and Google Inc (NASDAQ:GOOGL) as main competitors it suffered some difficulties differentiating.

Currently, Walgreen Company (NYSE:WAG) has lost the faith of investors and tries to overcome the situation. As of today, there’s been an announcement that activist investor Barry Rosenstein will join the board of the company. Mr. Rosenstein is the founder of the $11 billion hedge fund JANA Partners and joined Walgreen Company (NYSE:WAG) as it completes the acquisition of Alliance Boots, a British pharmacy chain. However, there is little to be inferred from these small pieces of information.

“On Wallgreen, though, the question becomes: what happens now? They did not pursue the inversion, there’s still some real questions there, there are some people who think there’s more to come in terms of shareholders fighting with this company,” said David Faber.

Although Jana Partners has only a 1.3% of Walgreen Company (NYSE:WAG)’s shares, it tries to influence the company towards a better overall performance. The inversion mentioned by Mr. Faber is a financial maneuver, in which a company legally moves its tax base into a region that has lower charges, that hasn’t been ultimately pursued by the company. Nevertheless, the announcement of such a possibility created enough fuss for politicians to think about stricter measures that will keep U.S. companies from fleeing in search of tax benefits.

On September 30, Walgreen Company (NYSE:WAG) will announce its fourth quarter results, which might give a clearer picture as to the retailer’s performance and future prospects.


Disclosure: none