Where is Walgreens competitive advantage?
Is there a compelling reason for consumers, or investors, to choose the drugstore chain over the competition?
Profitability fell slightly due to a slower cold and flu season, and the company also experienced some headwinds on its generic drug business, a segment that the company is heavily dependent on. Some 63 percent of the company's sales come from prescription drugs, and of those sales, the generic drugs are more profitable than their big-name counterparts.
More broadly though, Motley Fool analyst Jason Moser discusses in the video below that while he sees the prescription drug business as a stable one in the United States, he doesn't see any particular competitive advantage that Walgreens has, that would bring consumers there instead of to a competitor.
He tends to think that consumers will go to the closest pharmacy available to fill prescriptions, rather than seeing Walgreens as a destination that stands out above the crowd.
While the company has made some efforts to differentiate itself, Jason hasn't found them to be extremely compelling. The prescription drug business may generate stable sales, but for him, there are just better investing opportunities available today.
The Motley Fool's 12 top stocks for 2014 are now available! So if you're tired of picking stocks out of a hat and hoping that one skyrockets, check out Stocks 2014: The Investor's Guide to the Year Ahead. It's The Motley Fool's current top report, and includes Chief Investment Officer Andy Cross's top stock for 2014! This under-the-radar company is the secret winner in the war for the last precious drops of oil on the planet. Find out what it is and how you can take advantage of this unseen company's huge profits in this special, free report, just click here now.
I agree Duck.....Long term holder of WAG, one of the best stocks we have ever owned...
Have bought and sold a few times also...At least partials..
Copyright © 2014 Microsoft. All rights reserved.
These hot movers could rise by double digits in coming months.
VIDEO ON MSN MONEY
Top Stocks provides analysis about the most noteworthy stocks in the market each day, combining some of the best content from around the MSN Money site and the rest of the Web.
Contributors include professional investors and journalists affiliated with MSN Money.
Follow us on Twitter @topstocksmsn.