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PNC Financial Services Group (NYSE:PNC) manages $43 billion in equity assets primarily through its investment advisory subsidiary PNC Wealth Management, which controls the PNC Series of mutual funds. PNC employs both growth and value approach to investing and holds stocks for the long term. The firm primarily invests in small - to large-cap companies utilizing a combination of fundamental and quantitative analysis.

I discussed the Top Buys of PNC Financial Services in my previous article. In addition to buys, it is also interesting to have a look at top companies where PNC Financial Services is booking profit and selling its holdings. The following is a list of its top sells in the last quarter, as released in PNC's most recent 13F filing with the SEC.

Stock

Symbol

Shares Held - 03/31/2011

Shares Held - 06/30/2011

Citigroup, Inc.

(NYSE:C)

16278218

1568552

Coach Inc.

(NYSE:COH)

1437703

475080

Starbucks Corp.

(NASDAQ:SBUX)

1794150

485560

General Mills Inc.

(NYSE:GIS)

4055886

2772695

Core Laboratories NV

(NYSE:CLB)

414736

69558

T. Rowe Price Group, Inc.

(NASDAQ:TROW)

2233387

1671948

Hewlett-Packard Company

(NYSE:HPQ)

3327965

2401735

Exxon Mobil Corp.

(NYSE:XOM)

19453492

19069627

Walgreen Co.

(NYSE:WAG)

1480762

819539

Procter & Gamble Co.

(NYSE:PG)

15120176

14743076

My favourite short from the above listed stocks is Walgreen and I believe its stock price is likely to continue its underperformance going forward. Walgreen is the United State’s leading drug retailer. Usually it is considered a defensive stock, and I wouldn’t have been so bearish on it if it was any other downturn. However, recent negative developments pose serious risks to its core business.

On 21-Jun-11, WAG announced that “it is planning not to be a part of Express Scripts, Inc.’s (NASDAQ:ESRX) pharmacy provider network effective 1-Jan-12, as negotiations on a contract renewal have been unsuccessful.” If a contract renewal is not reached, beginning next calendar year, Express Scripts’ network would no longer include WAG’s more than 7,700 pharmacies nationwide. WAG estimates that Express Scripts processes approximately 90 million prescriptions that are expected to be filled by Walgreens in FY11, representing approximately $5.3 billion in annual sales. WAG disclosed that the company expects this to adversely affect net sales, net income, and cash flows in FY12.

To make things worse, ESRX has recently announced acquisition of Medco (NYSE:MHS). If this happens Walgreen is at a risk of loosing MHS business as well. The ESRX and MHS combination approximately represent 20-25% of Walgreens’ annual script volume and this pose a serious risk.

In addition to ESRX risk (2012 event), near term trends are also not going in the right direction with monthly sales increase is moderating. Walgreen reported 4.7% sales increase in July vs. 6.8% and 7% in June and May respectively.

CVS Caremark (NYSE:CVS) is a much better alternative than Walgreen for those investors who are looking for a defensive play in these uncertain times.

For other companies in the above list, here are some of the specifics about these companies, including a brief description of their business, growth expectations (topline and bottomline):

  • Citigroup Inc. is a global diversified financial services holding company. Citigroup businesses provide consumers, corporations, governments and institutions with a range of financial products and services. Citigroup’s EPS forecast for the current year is $4.10 and next year is $5.22. According to consensus estimates, its top line is expected to decline 6.70% in the current year and 5.80% next year.
  • Coach, Inc. is a marketer of fine accessories and gifts for women and men. Coach’s product offerings include handbags, women’s and men’s accessories, footwear, business cases, jewellery, wearables, sunwear, travel bags, fragrance and watches. Coach operates in two business segments: Direct-to-Consumer and Indirect. Coach’s EPS forecast for the current year is $3.38 and next year is $3.91. According to consensus estimates, its top line is expected to grow 12.20% in the current year and 11.50% next year.
  • Starbucks Corporation is the roaster and retailer of specialty coffee in the world, operating in more than 50 countries. Starbucks purchases and roasts whole bean coffees and sells them, along with handcrafted coffee and tea beverages and a variety of fresh food items, through Company-operated retail stores. Starbucks’ EPS forecast for the current year is $1.52 and next year is $1.82. According to consensus estimates, its top line is expected to grow 8.50% in the current year and 10.10% next year.
  • General Mills, Inc. is a global manufacturer and marketer of consumer foods sold through retail stores. The Company is also a supplier of branded and unbranded food products to the foodservice and commercial baking industries. General Mills’ EPS forecast for the current year is $2.61 and next year is $2.83. According to consensus estimates, its top line is expected to grow 10.10% in the current year and 4.00% next year.
  • Core Laboratories N.V. is a provider of reservoir description, production enhancement and reservoir management services to the oil and gas industry. Core Lab operates in three business segments: reservoir description, production enhancement and reservoir management. Core Laboratories’ EPS forecast for the current year is $3.73 and next year is $4.82. According to consensus estimates, its top line is expected to grow 15.70% in the current year and 19.10% next year.
  • T. Rowe Price Group, Inc. is a financial services holding company. It provides investment advisory services to individual and institutional investors in the sponsored T. Rowe Price mutual funds and other investment portfolios. The Company operates its investment advisory business through its subsidiary companies, primarily T. Rowe Price Associates, Inc. and T. Rowe Price International Ltd. T.Rowe’s EPS forecast for the current year is $3.13 and next year is $3.66. According to consensus estimates, its top line is expected to grow 22.30% in the current year and 13.20% next year.
  • Hewlett-Packard Company is a provider of products, technologies, software, solutions and services to individual consumers, small- and medium-sized businesses and large enterprises, including customers in the government, health and education sectors. Its operations are organized into seven segments: Services, Enterprise Storage and Servers, HP Software, the Personal Systems Group, the Imaging and Printing Group, HP Financial Services, and Corporate Investments. HP’s EPS forecast for the current year is $5.02 and next year is $5.37. According to consensus estimates, its top line is expected to grow 2.60% in the current year and 3.60% next year.
  • Exxon Mobil Corporation is a manufacturer and marketer of commodity petrochemicals, including olefins, aromatics, polyethylene and polypropylene plastics and a range of specialty products. It also has interests in electric power generation facilities. Exxon’s EPS forecast for the current year is $8.57 and next year is $9.04. According to consensus estimates, its top line is expected to grow 21.70% in the current year and 8.10% next year.
  • The Procter & Gamble Company is focused on providing consumer packaged goods. The Company’s products are sold in more than 180 countries primarily through mass merchandisers, grocery stores, membership club stores, drug stores and high-frequency stores, the neighbourhood stores, which serve many consumers in developing markets. P&G’s EPS forecast for the current year is $3.93 and next year is $4.26. According to consensus estimates, its top line is expected to grow 4.30% in the current year and 5.80% next year.
Source: The Top Stocks PNC Financial Services Is Selling