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Walgreen Company (WAG) stock is in need of a prescription against the bad reaction it's experiencing after issuing its fiscal third-quarter report. At the time of this writing, shares of the pharmacy chain were down over 6% to $28.26. That's not too far off from the 52-week low of $27.89. Here's the kind of chart that can mess you up. On the one hand, you might look at it and conclude that now may be the time to buy since the stock was doing so well before; you would believe you were buying low with the intent of selling high, as they say. On the other hand, it's a confusing mess, as it doesn't give you any sense of where the equity may be heading. Hey, going by charts alone is never advisable, as technical interpretation will never be a perfect science (some might argue it isn't science at all).
According to this article, Walgreen Company failed during Q3. On a reported basis, net profit dropped six pennies to 47 cents per share. Same-store sales were essentially flat. And the adjusted profit number came in below expectations. Call me disappointed.
When it comes to this type of business, I believe CVS Caremark (CVS) is the better long-term play. I do think, however, that Walgreen could be attractive at the price I'm seeing.
If the shares dip below the $28 level, market players may want to perform some due diligence. Indeed, as I said before, the chart isn't straightforward with Walgreen, but it is a major pharmacy brand, and management will have incentive to work harder to fix the fundamentals now that Wall Street has given the latest release a negative review.
Disclosure: I don't own any company mentioned; positions can change without notice.
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