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For long-term health, try dose of Walgreen
Shares of Walgreen ($36; NYSE: WAG) have come under pressure in recent months, reflecting a slowdown in sales because of a weakening economy and intensifying competition. However, Walgreen’s long-term prospects remain appealing, and the stock is attractively valued. Walgreen is a Long-Term Buy. Big, strong, and healthy Prescriptions generate about 65% of total sales, with the rest coming from general merchandise. In fiscal 2007, both pharmacy and general-merchandise sales growth outpaced the industry average, and Walgreen increased market share in nearly all of its core categories. 2007 represented the company’s 33rd consecutive year of sales growth. Walgreen has expanded beyond pharmacy services with in-store health clinics and a managed-care division. Acquisitions pick up In September, Walgreen paid $850 million for OptionCare, which specializes in infusion drugs such as cancer treatments. The deal was the largest in Walgreen’s history and made the company the nation’s largest independent specialty pharmacy. The specialty-pharmacy market is growing much faster than the overall pharmacy market. In March, Walgreen agreed to acquire I-trax and Whole Health Management, which operate health centers at corporate offices, paying $260 million for I-trax and an undisclosed amount for Whole Health. After those deals close, Walgreen will operate more than 500 worksite and retail health centers in 40 states, including its in-store clinics. Solid growth outlook The stock looks cheap relative to its solid growth outlook. At 15 times estimated year-ahead earnings of $2.36 per share, Walgreen trades well below its five-year average forward P/E of 23. Consensus estimates project per-share-profit growth of 9% in fiscal 2008 ending August and 12% in fiscal 2009, targets the company should be able to beat. An annual report for Walgreen Co. is available at 200 Wilmot Road, Deerfield, IL 60015; (847) 914-2500, www.walgreens.com.
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Monday, May 12, 2008
Once upon a time, dividends were more important than capital gains …

For long-term health, try dose of Walgreen
Wednesday, May 14, 2008
Shares of Walgreen ($36; NYSE: WAG) have come under pressure in recent months, reflecting a slowdown in sales because of a weakening economy and intensifying competition. However, Walgreen’s long-term prospects remain appealing, and the stock is attractively valued. Walgreen is a...

Wednesday, May 14, 2008
The major averages have been choppy but remain near recent highs, with continued strength in the energy, industrials, materials, and technology…
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