Seeking Alpha

Overreaction to Walgreen staying in Chicago?

  • Retail analyst Rahul Sharma thinks the market is overreacting to Walgreen (NYSE:WAG) pulling the tax inversion move out of its playbook.
  • If there's a concern with the integration of Alliance Boots, Sharma thinks the slower revenue growth of the the European firm should be watched.
  • The sudden dip in Walgreen has put shares back in line or below valuation on peers.
  • WAG -15.8% premarket
  • WAG tax inversion timeline
Comments (13)
  • Wes Blevins
    , contributor
    Comments (35) | Send Message
    Trading in pre-market at 13.6X the low-end of the company's projected 2016 earnings. Yielding 2.3 percent at these levels.
    Great time to put in a limit order.
    6 Aug, 09:26 AM Reply Like
  • JD in NJ
    , contributor
    Comments (981) | Send Message
    My buy order is in to add to my position. What an opportunity.
    6 Aug, 09:32 AM Reply Like
  • uncledace
    , contributor
    Comments (102) | Send Message
    I added to my position this morning too.
    6 Aug, 09:39 AM Reply Like
  • Wes Blevins
    , contributor
    Comments (35) | Send Message
    Not often you find well-run companies on sale like this.
    6 Aug, 09:42 AM Reply Like
  • Exquisite Decay
    , contributor
    Comments (173) | Send Message
    Bought some more this morning at $58.38. Last time I bought WAG was two years ago at below $30 when it announced its initial purchase of some of Alliance Boots along with a hefty dividend increase of over 22%. Stock plunged at the opening which brought the dividend yield to around 3.75% back then. This is not as great a deal but I will take it.
    6 Aug, 09:54 AM Reply Like
  • mbaietti
    , contributor
    Comments (75) | Send Message
    Added to my position this morning too. A big shout out to all the short term traders, it's not often you give us such a nice entry point in a quality name!
    6 Aug, 10:10 AM Reply Like
  • Neurology
    , contributor
    Comments (83) | Send Message
    Someone mentioned that a dividend increase had been announced but I have yet to confirm. Anyone with info?
    6 Aug, 10:42 AM Reply Like
  • Wes Blevins
    , contributor
    Comments (35) | Send Message
    Yes, a 7.1 percent increase to $0.335 per share
    6 Aug, 10:50 AM Reply Like
  • drew111
    , contributor
    Comments (445) | Send Message
    Wow, the market is reacting stupidly. Ballpark of 20% margin of safety...
    6 Aug, 11:45 AM Reply Like
  • june1234
    , contributor
    Comments (2689) | Send Message
    Will be interesting to see going forward if mgmt is replaced by a more street friendly one
    6 Aug, 12:26 PM Reply Like
  • Canuk100
    , contributor
    Comments (39) | Send Message
    ... has anyone figured out what the real tax implications are for not doing the inversion? While it might be profitable to do the inversion tax wise is really worth $10.00 a share???
    6 Aug, 12:39 PM Reply Like
  • JohnMcCarthyIII
    , contributor
    Comments (13) | Send Message
    $4 Billion over 5 years
    6 Aug, 05:37 PM Reply Like
  • Dividend Geek
    , contributor
    Comments (6) | Send Message
    WAG also lower 2016 guidance from $4.25 to $4.60, below the current FactSet consensus of $5. The market is overreacting nothing here that's not fixable. Long term this is a nice opportunity so I'm adding to my position.
    6 Aug, 02:30 PM Reply Like
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