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.
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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..
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It's time for a reality check in advance of the Chinese e-commerce giant's much anticipated initial public offering.
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