Walgreen Boots Alliance (WBA)

It lags behind CVS-N, but with their new CEO, they will increase their private label penetration and margins. They generate a lot of cash it will be used to buy back shares and increase the dividend.

It is a mix of an old drug store and basic healthcare. It is fully valued however it is and is fine to own longer term. Look for a better entry point.

There are a couple of things you have to think about. They made the acquisition of Rite Aid, which is what is really going to drive the stock. They will probably have to sell between 500 and 1,000 stores. Trading at 18X earnings. Feels the dividend is secure.

(A Top Pick April 20/16. Up 1.62%.) Right now, no one is in a rush to jump into this business. Not a lot has changed here. He is still waiting to hear about Rite Aid and whether they can own it or not. Even if the deal does not go through, they will be doing something else with the money.

Undergoing a transition to drive improved profitability out of its existing asset base. He is going to be a long-term holder of this business. Over time, they are going to add a lot of value. A very smart management team. Not an expensive valuation. Dividend yield of 1.84%.

CVS (CVS-N) or Walgreen Boots Alliance (WBA-Q)? This has a pending merger with Rite Aid, and he thinks the synergies are going to be pretty impressive. He likes them both.

Given the nature of its business, tending to be more of a pharmacy, it probably won’t be too heavily harmed by Brexit. They plan to add Rite Aid (RAD-N), which will be very additive and a lot of opportunity.

Over the last 30 years, they have compounded shareholders’ wealth at 10%. They are changing the front of the store, moving up the ranks. Today you are paying 15X and thinks you’re getting Rite Aid for free.

Going through a process where they are looking to buy Rite Aid (RAD-N), which should close in the next quarter. There will be some disposals of storefronts. Views on this range from being a very few to upwards of 200-300. There was a recent disappointment on earnings and revenues. Recently sold his holdings because their outlook is so muted. Also, there is a UK side, which has created a pressure with the pound having dropped so much.

A very strong business. Prefers CVS (CVS-N) which is both on the retail front as well as Pharmaceutical Benefits Management. However, they are struggling outside of their business. Walgreen has better metrics and scores better in terms of customer satisfaction results. Both companies are very close in terms of operational management expertise.

Continues to have opportunity to rationalize costs through their original merger, and has room to continue to do that. Going to grow their earnings 12%-13% next year, and probably 12%-15% the following year. On a relative basis, it has been picking up versus the group recently. This is going to be a steady performer. In the market we are in currently, medical devices are very attractive and he likes them for capital appreciation. You might make a little more money in Medtronic (MDT-N). Dividend yield of 1.7%.

A very good franchise, and certainly with Boots it is even stronger. This is defensive at its core. It has some ability to set pricing. Experimenting with smaller store footprints at increased profitability. Longer-term, healthcare remains one of the most attractive segments of the market.

This did the Boots’ acquisition which gives them the 1^st cross-border type of benefit. She has stayed away from a lot of these consumer staple kind of names, on the prospect of a higher interest rate. Ever since the recession there has been a huge need for yield.

Recently did a deal with Rite Aid (RAD-N) that is going to put them into the US North East and Mid-Atlantic. There will be over $1 billion of synergies there. This is a company that has proven that they are not afraid to make acquisitions. Well-managed and will grow into the future. Dividend yield of 1.8%.

This has been as high as $97 last summer when the market peaked, and is now down around $80. Good financial operators and have made several very strategic acquisitions. Trading at around 15-16 times earnings. Lower than the market multiple, yet better growth potential. Well positioned to continue benefiting from the aging population’s healthcare needs. Dividend yield of 1.83%.