Walgreens (NYSE: WAG)
Originally recommended on July 20/09 (IWB #2927) at $29.82. Closed Friday at $42.74 (all figures in U.S. currency).
I recommended America's largest drugstore chain back in July 2009 when it was trading at $29.82. I reiterated my buy rating in December of that year when the stock was trading at $38.81. On Friday it closed at $42.74 for overall gain of 46% based on my original recommendation, including dividends totaling $0.90.
Walgreens had a pretty good month in January with sales increasing by 0.5% but that's down from sales in December and only modestly up from a dismal year ago in January 2010.
I think it's time to ring the register and take profits here. I'm not a big fan of retailers in general otherwise I would likely put a hold rating on the stock but we have had a nice gain and I think the upside is somewhat limited. The stock is trading near its 52-week high and I think there are better places to put your money. I don't hate the stock; I just think it's time to move on.
Action now: Sell for a gain of 46.3%.