I'm reiterating Buy ratings for giant drug store chains CVS-Caremark (NYSE: CVS) and Walgreen (NYSE: WAG) on likely increased store traffic, due to the H1N1 flu. So far, the nation is doing fairly well at ensuring that there will be enough swine flu vaccine for key populations --those who could quickly spread the virus like teachers, health care workers, emergency personnel etc., as well as other risk groups -- pregnant women, people caring for infants, people aged 25-64 who are at high risk due to compromised immune systems.
Still, the virus' second winter season (2010) looks like it will lead to, at minimum, a slightly worse flu season than 2009, when H1N1 cases are combined with regular flu cases.
That should boost already decent traffic for CVS and Walgreen, as Americans seek out their local drug stores for hand sanitizers, other disinfecting items, and flu symptom comforts, with customers purchasing related items during their trips.
The First Call FY2009/FY2010 EPS estimates for CVS are $2.62 to $3.01; for WAG, they are $1.99 to $2.26.
If you haven't already, consider a 50% in investment in CVS and/or WAG now; then you could buy another 25% in three months. Sell/Stop Losses are: CVS, $18; WAG, $17.
Disclosure: Lazzaro has no positions in stocks, but does own shares in two Pimco Bond Funds: PHDAX and PYMAX.
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Reader Comments (Page 1 of 1)
9-03-2009 @ 12:44PM
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