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Technical Analysis on GNC Holdings and Walgreen: Drug Store Stocks Set to Provide Good Returns
By: PR Newswire
Feb. 11, 2013 07:30 AM
LONDON, February 11, 2013 /PRNewswire/ --
Growing life expectancy is a good indicator of a nation's economic status, but at the very same time it also brings about the higher incidences of diseases and ailments. While the picture does not look pretty in general, it certainly is an attractive one for drug store companies. With growing demand for drugs, companies like GNC Holdings Inc. (NYSE: GNC) and Walgreen Co. (NYSE: WAG) are all set to see their stock prices soaring. These companies are also looking to expand their reach internationally. The sector also features competition, but the pie is big enough for all the players involved. StockCall has posted free technical research on GNC Holdings and Walgreen which can be downloaded upon sign up at http://www.stockcall.com/signup
GNC Holdings Continues on Growth Trajectory
GNC Holdings Inc. stock grew by 25 percent in the past 12 months and is rightly being lapped up by hedge funds. As per a recent filing by Citadel Investments, billionaire investor Ken Griffin now owns 3.5 million shares of the company, which is almost the double of its initial investment in the company. Alexander Mitchell's Scopus Asset Management also owns 2.5 million shares of the company. Hedge fund interest generally bodes well for a stock. The company holds leading position in nutrition and vitamins market. Sign up and read the complimentary report on GNC Holdings at http://www.StockCall.com/GNC021113.pdf
Apart from hedge fund interest, the company is doing well. GNC Holdings management upped its guidance for FY 2013. It is experiencing all-round growth as all its major segments including franchise, wholesale and retail recorded growth for FY 2012. The company has reported positive same-store sales growth for 29 consecutive quarters. GNC Holdings runs 7,600 retail locations globally and is active in 53 countries. With projected earnings growth of 22 percent for next five years, the company offers good long-term investment opportunity. For the third quarter of the year, GNC Holdings reported 28 percent increase in its earnings. The stock trades at Price/Earnings ratio of 16.81 and thus is not an expensive stock.
GNC is set to report its earnings today. Data were not available at the time this article was completed.
Walgreen Offers New Product Lines
Walgreen Co. stock is on the roll and touched a new 52-week high lately. The stock is up 23 percent in the past 12 months and offers a dividend yield of 2.66 percent. The company's dividend is likely to remain safe as it has manageable dividend payout ratio of 45 percent. Walgreen is also projected to grow its EPS at the rate of 13.23 percent in the coming five years. For FY 2012, the company grew its front end sales. However, its same-store sales slumped marginally. The free report on Walgreen can be downloaded by signing up now at http://www.StockCall.com/WAG021113.pdf
The drug store company is diversifying its offerings as it plans to sell Televisa Consumer Products to gain traction among its Hispanic customers. It is also expanding overseas as it acquired 45 percent stake in Alliance Boots to gain foothold in Europe. The company spent $6.7 billion for this purpose and expects the acquisition to add 23 to 27 cents per share to its EPS. Like other drug companies, Walgreen also stands to benefit from increased life expectancy, which will lead to higher demand for drugs and therapies. The stock currently trades at Price/Earnings multiple of 18.57, which is slightly higher than the multiple sported by its competitors GNC Holdings, but Walgreen's future prospects justify the pricing.
StockCall.com is a financial website where investors can have easy, precise and comprehensive research and opinions on stocks making the headlines. Sign up today to talk to our financial analyst at http://www.stockcall.com
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