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Moody's cautions on Walgreen's buyback plan

  • Moody's places some of Walgreen's (WAG -14.7%) commercial paper and debt on review for a potential downgrade.
  • The action from the ratings agency is due to Walgreen's announcement of a new $3B share repurchase program.
Comments (7)
  • redhat63
    , contributor
    Comments (73) | Send Message
     
    Over reaction. Buy back is discretionary!
    6 Aug, 02:50 PM Reply Like
  • King Rat
    , contributor
    Comments (648) | Send Message
     
    Even Berkshire Hathaway with all of their cash got downgraded a while back. Downgrade watch is no big deal.

     

    Buybacks require cash. Utilizing that cash either requires depleting reserves thus weakening financial ratios or issuance of of debt, weakening financial ratios. When debt ratings are based in large part on those ratios it would be irresponsible not to put a stock on downgrade watch when they repurchase stock or raise their dividend without a coinciding increase in cash flow.

     

    The 14% drop in WAG is more due to the announcement that they are not going to officially register as a non-US to save on taxes.
    6 Aug, 03:07 PM Reply Like
  • User 15699402
    , contributor
    Comment (1) | Send Message
     
    We have held WAG for a number of years -has been a good holding for us. The big hit today is probably a good buying opportunity.
    6 Aug, 03:48 PM Reply Like
  • Lone Star
    , contributor
    Comments (74) | Send Message
     
    Great buying opportunity. I've been holding for a while and plan to buy more on this opportunity
    6 Aug, 03:52 PM Reply Like
  • 25540633
    , contributor
    Comments (40) | Send Message
     
    Over reactions to unexpected news creates strong selling pressure on Walgreen share price this morning. This is a good buying opportunity because I think the company still has good fundamentals. Just added to my position this afternoon. the downfall is just temporary.
    6 Aug, 03:55 PM Reply Like
  • akendzio
    , contributor
    Comments (15) | Send Message
     
    So a company buys back stock at an advantageous price, and that's a bad thing? Did they forget to bribe someone at Moody's?
    6 Aug, 04:03 PM Reply Like
  • edhaven
    , contributor
    Comments (36) | Send Message
     
    I added additional shares to my portfolio. WAG has been good for me and whether it is good in the future remains to be seen. I think it will obviously.
    6 Aug, 10:23 PM Reply Like
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