Shoppers Drug Mart Corp (SC.TO) Buy, Sell or…

Shoppers Drug Mart Corp (SC.TO)

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DON'T BUY

Which is better, Shoppers (SC-T) or Walgreen (WAG-N)? Movement and some of the fundamentals of the 2 stocks are very similar. Both yielding about 2.4% and are trading at 14X PE multiples. Shoppers long-term earnings growth is expected to be 4% while Walgreen's is 14%. Consumers staple is not his favourite area.

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DON'T BUY

When Ontario government announced they were going to change the rules on generic drugs he took the opportunity to exit the stock and assess the landscape in the next couple of years. Expect other provincial governments will follow. Still good growth opportunities in Western Canada. Well managed, pays a dividend and trades at a reasonable multiple but he would like more clarity on the rules.

PAST TOP PICK

(A Top Pick Oct 21/09. Down 14.92%.) Still a Buy.

PAST TOP PICK

(Top Pick Oct 26/09. Up 14.58%.) Recommended to his clients that they cover down on the $32-$33 area but thinks it is still going lower so be patient..

PAST TOP PICK

(A Top Pick Sept 15/09. Down 13%.) Sold his holdings a while ago. It was a defensive stock in uncertain times with decent growth. Decision by the Ontario government has basically taken out 2-3 years of growth.

HOLD

What has impacted these stocks is the changes in Ontario and Quebec. The front of store sales had not been as robust as they had hoped. Extremely well run company and at a reasonable price. Dividend is safe.

PAST TOP PICK

(Top Pick Aug 28/09. Up 16%.) Had shown this is a short because it was under performing. Still not satisfied that it has reached a bottom yet.

WAIT

Thinks you could go a fair bit lower. The sector is terrific. Because of generic drug pricing in Ontario, it will bit their bottom line. Reasonable dividend. It might be more interesting after they report their next quarter results. A leader in the field.

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BUY

Thinks the stock has bottomed now and you can get in. All the provinces have come out with their new drug regulation plans with Ontario's being the most onerous. Company will certainly take a hit on these primarily starting next year. Trading at about 13X this year's earnings. Long-term hold.

BUY

All the bad news is now out. All the provinces that are going to slash generic pricing have done it. Earnings flat for next couple of years. Will grow starting 2011/2012 and dividends will start to grow.

PAST TOP PICK

(Top Pick Aug 31/09, Down 17.02%) Government announcement was more punitive than anyone thought.

WAIT

Classic consumer staples stock. Great run company. They will work though the fee thing from the province in Ontario. You may see it bounce around from here. He wouldn’t jump all over it yet.

TOP PICK

Had a very poor 2nd quarter sparked by the new regulations by the Minister of Health. Starting to crawl back. Expect this will allow them to take market share from smaller pharmacies.

BUY

It has bottomed. All the bad news has come out. Trading at a nice valuation. Possibility of a dividend increase. Pharmacy business can only get better.

PAST TOP PICK

(Top Short Aug 28/09. Up 16.5%.) When the market took off in March/09, the stock did not participate, which is why the picked this as a Short.

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Shoppers Drug Mart Corp (SC.TO)