If we told you that the largest pharmacies chains in the U.S., CVS Caremark (CVS) and Walgreens (WAG), planned to sell more groceries and produce, would you believe us? If so, you would be right. CVS Caremark plans to double the size of its food section and revamp about 20% of its 7,000 stores to better cater to groceries and quick check outs, and Walgreens started to satiate its appetite for the nation's trillion-dollar food budget by announcing last year that it would add up to 500 food items including salads, sandwiches, frozen meats, soups, juices, yogurts and even sushi to its offering.

How Do Consumers Benefit?

Continue reading CVS Stocks More Food That Could Add More Beef to Our Upside

CVS Stocks More Food That Could Add More Beef to Our Upside originally appeared on BloggingStocks on Wed, 16 Feb 2011 16:00:00 EST. Please see our terms for use of feeds.

CVS Caremark (CVS), a drugstore chain that competes with Rite-Aid Corporation (RAD), Walgreen Company (WAG), and Wal-Mart Stores, Inc. (WMT), is acting in a boring way this afternoon. My screen shows, at the time of this writing, the stock down 44 cents, or 1.2%, to $36.64.

That's not too bad for the kind of trading session we're having. I bet CVS would have been up today following its Q1 report had the market action been different. But the tape is the tape, you can do nothing about that. According to Bloomberg BusinessWeek, the company made, on an adjusted basis, 60 cents per share, which was two pennies ahead of estimates.

Continue reading Does CVS Look Okay After Q1 Report?

Does CVS Look Okay After Q1 Report? originally appeared on BloggingStocks on Tue, 04 May 2010 18:00:00 EST. Please see our terms for use of feeds.

CVS Caremark (CVS), which competes with Walgreen (WAG), Rite Aid (RAD), and Wal-Mart (WMT), posted fourth-quarter data on Monday. Sales increased 7%, and adjusted earnings per share from continuing operations (excluding, in addition, a penny per share relating to a tax benefit) came in at 78 cents -- good for a growth rate of over 11%. That bottom-line performance matched analyst projections, according to our earnings preview.

As we all know, matching expectations is sometimes the death of a stock. The market has no conscience when it comes to mercilessly punishing an equity for not going beyond the call of the analysts. However, CVS actually did pretty well yesterday, rising 5% by the end of the session; the move was backed by healthy volume.

Continue reading CVS Caremark: Long-Term Bet After Q4?

CVS Caremark: Long-Term Bet After Q4? originally appeared on BloggingStocks on Tue, 09 Feb 2010 08:30:00 EST. Please see our terms for use of feeds.

Walgreen (WAG), a drugstore chain that competes with CVS Caremark (CVS) and Rite Aid (RAD), issued fiscal Q1 numbers on Monday. The growth rates were impressive.

Total sales were up 9.5%. Net income increased almost 20% to 49 cents per diluted share. Operational cash flow was higher by over three times. According to our earnings preview, analysts were expecting 48 cents per share. Of course, since there were restructuring charges included in the above per-share profit stat (equal to 3 cents per share), the beat is better than it looks. This was indeed a good quarter.

Continue reading Walgreen Achieves Impressive Growth in Q1

Walgreen Achieves Impressive Growth in Q1 originally appeared on BloggingStocks on Tue, 22 Dec 2009 17:30:00 EST. Please see our terms for use of feeds.

According to this summary at Reuters, top-line sales decreased a little under 2%, and the loss per share came in at 10 cents. This was a lot better than the 30 cents per share lost in the comparable quarter. Expectations were for the red ink to be closer to 18 cents per share.

Continue reading Rite Aid Defeats Analysts in Q3, but Investors Should Be Careful

Rite Aid Defeats Analysts in Q3, but Investors Should Be Careful originally appeared on BloggingStocks on Fri, 18 Dec 2009 16:30:00 EST. Please see our terms for use of feeds.

Continue reading CVS Caremark wins $1B Texas teachers' retirement contract

CVS Caremark wins $1B Texas teachers' retirement contract originally appeared on BloggingStocks on Fri, 11 Dec 2009 13:40:00 EST. Please see our terms for use of feeds.

Rite Aid (NYSE: RAD), which competes with Walgreen (NYSE: WAG), CVS Caremark (NYSE: CVS), and Wal-Mart (NYSE: WMT), saw a big increase in volume on Wednesday after it reported earnings for the first quarter. In fact, as Douglas McIntyre observed, shares of Rite Aid were up 5% at one point during yesterday's session. However, the shares ended up losing their green status by the close of trading. Rite Aid actually lost 3% when all was said and done. What does it all mean?

Well, Rite Aid did beat analyst forecasts by a wide margin. The call was for a loss of 13 cents per share. Rite Aid lost only 6 cents per share once adjustments are made. Revenues dipped a little over 1%, and same-store sales, after excluding the effect of the Brooks Eckerd acquisition, increased 1.5%. Interestingly, the mix of this increase is as follows: the pharmacy sales went up 3.1% on a comparable basis, and the non-pharmacy sales went down 1.4% on the same basis.

Continue reading Rite Aid beats analysts, but not right for me yet

Rite Aid beats analysts, but not right for me yet originally appeared on BloggingStocks on Thu, 25 Jun 2009 09:00:00 EST. Please see our terms for use of feeds.

Rite Aid (NYSE: RAD), whose competitors include Walgreen (NYSE: WAG), CVS Caremark (NYSE: CVS), and Wal-Mart (NYSE: WMT), reported Q4 numbers today, and when you read through the release, you sort of come away with a decent feeling. You hear about improvements in this metric and that metric. You wonder if a turnaround might be in the offing. Then you look at the stock price and, even though it is currently being bid higher (it's up over 14% as I write), you come back down to earth and reality hits you in the face. Anything trading under a buck has to give you pause. Rite Aid is no different.

For the quarter, Rite Aid posted a 1.7% decrease in the top line. On an adjusted basis, the drugstore chain reported a loss of $0.14 per share. According to this source, Wall Street thought Rite Aid might lose $0.105 per share. The company is still adjusting to the Brooks Eckerd acquisition. Excluding that effect, same-store sales increased 0.8%. Including the asset, comps decreased 0.1%.

Continue reading Rite Aid up on Q4 report -- can you buy it now?

Rite Aid up on Q4 report -- can you buy it now? originally appeared on BloggingStocks on Thu, 02 Apr 2009 15:10:00 EST. Please see our terms for use of feeds.

Walgreen

Continue reading Walgreen looking for growth with wellness network

Walgreen looking for growth with wellness network originally appeared on BloggingStocks on Thu, 15 Jan 2009 11:10:00 EST. Please see our terms for use of feeds.

CVS-Caremark (CVS) plunges on lowered 2009 forecast originally appeared on BloggingStocks on Fri, 09 Jan 2009 13:37:00 EST. Please see our terms for use of feeds.

Rite-Aid Corporation (NYSE: RAD) is the drugstore you should avoid. You can consider CVS Caremark (NYSE: CVS). You can take a look at Walgreen Company (NYSE: WAG). Rite-Aid? It's definitely not the cure for an ailing portfolio.

The troubled pharmacy chain is no stranger to losses and its public stock sits well below a buck a share. The third quarter numbers don't look too appealing. On an adjusted basis, Rite-Aid lost $0.15 per share. That may have been better than what analysts were calling for, namely a loss of $0.17 per share, but you have to look at the overall picture. Rite-Aid is closing stores, and that will hamper sales going forward (not to mention its brand equity, as well). Some will argue that it's all part of the turnaround. Sure, turnarounds can be ugly and painful, granted, but that doesn't mean you have to participate, hoping for the best. Why hop on this low-priced equity when integration of the Brooks Eckerd assets doesn't seem to be going very well?

According to the press release, there are a few positive statistics. Management says that overall same-store sales were up 1.4%, EBITDA increased over 8%, and operational cash flow was positive over the last three quarters (by comparison, cash was used for operations in the year-ago similar period). But the guidance isn't good, and I have no confidence in this management team to improve its GAAP performance. The company has to juice its sales, but with competition from stronger foes like CVS Caremark and Walgreen, I just don't see any silver lining to the Rite-Aid story. Turnaround specialists can make whatever argument they want. As for me, I'm going to make like the galaxy in Star Wars and stay far, far away from Rite-Aid's stock...

Disclosure: I don't own any company mentioned; positions can change at any time.

Rite-Aid: Not the right stock for me (or anyone) originally appeared on BloggingStocks on Thu, 18 Dec 2008 17:20:00 EST. Please see our terms for use of feeds.

Walgreen (NYSE: WAG), a drugstore chain which competes with CVS Caremark (NYSE: CVS) and Rite Aid (NYSE: RAD), dropped the ball in the fourth quarter, at least as far as analyst estimates are concerned. On a GAAP basis, Walgreen increased its earnings per share by a nickel, coming in at 45 cents.

That would be pretty cool if there were no adjustments to be made. Unfortunately, there is one. It relates to an adjustment for vacation-time accrual, which added almost $80 million to the bottom line. Take that away, and you get no earnings growth, as earnings per share would have been 40 cents, meaning non-GAAP number missed expectations by 5 cents.

I think Walgreen is a strong brand in its space. However, with the economic meltdown continuing its dire course, I would imagine that the chain is going to become affected by it, strong brand or not. Drug prescriptions certainly might be considered a defensive element in such an environment, but keep in mind that Walgreen doesn't just make its money on prescription sales. It sells a whole host of items in every location. And I'd have to imagine that the consumer is going to be scaling back. Yep, get ready for the good ole negative wealth effect.

Continue reading Walgreen stumbles in Q4

Walgreen stumbles in Q4 originally appeared on BloggingStocks on Tue, 30 Sep 2008 09:45:00 EST. Please see our terms for use of feeds.

Rite Aid (NYSE: RAD), a drugstore brand that competes with Walgreen (NYSE: WAG) and CVS Caremark (NYSE: CVS), reported results for the second quarter on Thursday. Unfortunately, they did not meet the expectations of analysts. Revenues were basically flat at $6.5 billion. The net loss more than doubled to $0.27 per diluted share, compared to $0.10 per diluted share one year ago. According to this item, Wall Street was hoping that Rite Aid might be able to deliver a loss of $0.15 per diluted share. Furthermore, that news source states that guidance for the fiscal year is worse than the consensus. The consensus believed that Rite Aid might bleed about $0.51 per share in red ink. The loss will at least be $0.56 per share, according to management. It might even go as high as $0.67.

So, I just gave out all the nasty stuff. Is there anything encouraging from the release? Let me put on my look-on-the-bright-side glasses. Net cash from operations was positive during the quarter. Over $96 million was generated. Last year, operations required almost $140 million. I dig cash, no doubt about it. But I really love free cash flow. If you add back sale-leaseback transactions, there was some free cash, but I can't say it changes my general stance on Rite Aid. I mean, overall same-store sales are weak, and the stock is currently priced at less than a buck. It's done horribly year-to-date according to the AOL Finance snapshot taken at the time of this writing. Down 67%. Not encouraging.

Rite Aid's shares aren't so much stock certificates as they are lottery tickets. Do you like playing the lottery? If so, go buy one of those scratch-off deals. You might have better luck with them than you would with Rite Aid.

Disclosure: I don't own any company mentioned; positions can change at any time.

Rite Aid disappoints investors in Q2 originally appeared on BloggingStocks on Fri, 26 Sep 2008 10:45:00 EST. Please see our terms for use of feeds.

CVS to open high-end beauty stores originally appeared on BloggingStocks on Fri, 22 Aug 2008 17:40:00 EST. Please see our terms for use of feeds.

CVS Caremark

Looking through the reported growth rates, you can see that we're talking best-of-breed here. Revenues were up over 60%, and adjusted earnings per share increased over 18%, coming in at $0.55. The Caremark merger has obviously proven to be a good move. Same-store sales rose 3.9%, benefited in part by the early appearance of Easter in March.

According to earnings.com, CVS Caremark basically matched earnings expectations. That's okay, though, I don't think you can hold it against this big brand name. As of this writing, CVS is near a 52-week high. Buying at the 52-week high is always a dicey thing, but if you plan on holding for years, it wouldn't be that much of a concern. Shorter-term traders would need to wait for a pullback. But I like the first quarter results for CVS, and I think the stock is poised to do well over time. And like I said at the beginning, this really may be a stock for the core portion of an individual's investment program -- a true buy-and-hold idea.

Disclosure: I don't own shares in any company mentioned here; positions can change at any time.

CVS: Is the company core-portfolio material? originally appeared on BloggingStocks on Mon, 05 May 2008 15:35:00 EST. Please see our terms for use of feeds.

Continue reading Seven stocks for seven years from BusinessWeek's Gene Marcial

Seven stocks for seven years from BusinessWeek's Gene Marcial originally appeared on BloggingStocks on Fri, 02 May 2008 18:29:00 EST. Please see our terms for use of feeds.

MAJOR PAPERS:

• Luqman Arnold, the former UBS AG (NYSE: UBS) president forced out in 2001, wants the firm to split its investment bank from the private client bank, and look at selling the investment bank and asset management business, according to the Wall Street Journal's "Heard on the Street".
• Microsoft Corporation's (NASDAQ: MSFT) bid to acquire Yahoo! Inc (NASDAQ: YHOO) has not gained any steam even though executives of the two companies met this week, the Wall Street Journal reported.
• The Financial Times reported that the landmark merger that created Citigroup Incorporated (NYSE: C) was a "mistake" that failed to benefit the financial services giant's investors, customers and employees, said John Reed, who masterminded the $166B deal with Sandy Weill in 1998. Reed, the former head of Citicorp, has advised Citigroup CEO Vikram Pandit at least to consider spin-offs, sources said.

• Walgreen Co (NYSE: WAG) is branching out by acquiring two companies that provide health-care services, BusinessWeek reported, following in its competitor CVS Caremark Corporation's (NYSE: CVS) shoes. Some investors are wary of Walgreen's move, but Mark Wiltamuth of Morgan Stanley sees it as a new growth avenue and as a push into services complementary to drugstores.

Newspaper wrap-up: Merger that created Citigroup was a mistake, one of deal's architects says originally appeared on BloggingStocks on Fri, 04 Apr 2008 08:15:00 EST. Please see our terms for use of feeds.

Walgreen Company (NYSE: WAG) reported earnings for the second quarter on Monday. Net sales grew by a very decent 10%. Diluted earnings per share for the quarter were $0.69 versus $0.65 in the year-ago period; this represents a bottom-line gain of 6%.

Considering some of the other action on Wall Street on Monday -- the increased offer for Bear Stearns, the approval of the Sirius/XM merger -- Walgreen's earnings report was simply an okay event, even though the stock closed up around 5% on the news. Same-store sales may have increased 4.7%, but the retailer sold a lot of items with lower margins this time around, thus reducing its gross-margin metric by 14 basis points (the release did cite a big shift to pharmacy sales in the quarter as having negatively impacted margins). So Walgreen needs to work on its non-pharmacy revenues. One cool thing from the report is the jump in net cash from operations -- that number increased by 10%.

Walgreen, which competes with CVS Caremark Corporation (NYSE: CVS) and Rite Aid Corporation (NYSE: RAD), isn't a bad way to play the long-term drug-retailing business. To be sure, baby boomers -- as well as everyone else -- will always need to visit drugstores on a go-forward basis. It's the company that can capture a significant amount of non-pharmacy sales that will prosper the most. Walgreen and CVS are excellent brand names in this sector -- I'm not so keen on Rite Aid, though (take a look at the stock price and see if you think the company might be cheap-for-a-reason, as they say).

Disclosure: I don't own any shares in any of the companies mentioned here; positions can change at any time.

Walgreen's earnings were an 'okay event' originally appeared on BloggingStocks on Mon, 24 Mar 2008 17:41:00 EST. Please see our terms for use of feeds.

Continue reading CVS Caremark Corp (CVS) to continue taking its own medicine

CVS Caremark Corp (CVS) to continue taking its own medicine originally appeared on BloggingStocks on Thu, 15 Nov 2007 16:00:00 EST. Please see our terms for use of feeds.

Continue reading CVS (CVS): Methodical and efficient, if not idyllic

CVS (CVS): Methodical and efficient, if not idyllic originally appeared on BloggingStocks on Tue, 23 Oct 2007 19:50:00 EST. Please see our terms for use of feeds.