Alan Brochstein, CFA
Contrarian, growth at reasonable price, management change, cannabis stocks

Wounded By Walgreen: Cardinal Is Still Healthy

In March, Walgreen (WAG) announced a new distribution agreement with AmerisourceBergen (NYSE:ABC). Described by both parties as transformational, the news sent both stocks soaring subsequently. For every winner, though, is a loser, and in this case Cardinal Health (NYSE:CAH), which lost the contract, was hit hard, dropping more than 10% over the next two days. Clearly this was a surprise to the market, but investors were aware of the possibility of contract loss or renewal at a lower price, and it appears that the stock may have overreacted. CAH, up just 3% in 2013 and rather flat over the past two years, has trailed peers and the Healthcare sector in general and offers a good entry...

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