Financial Stocks to Love The subprime mortgage meltdown and resulting credit crisis have slammed financial stocks recently. But there are still some diamonds in the rough. They include Berkshire Hathaway, RBS, AFLAC, Raymond James and BOK. Financial stocks we love - CNNMoney.com
Big Mac's Local Flavor Once vilified for pushing America on the world, McDonald's lets countries invent their own buns, bags, and business practices. Now some ideas are making their way back home. Big Mac's local flavor - FORTUNE
CVS Caremark (NYSE: CVS), a big competitor of both Walgreen (NYSE: WAG) and Rite Aid (NYSE: RAD), released its Q1 earnings last week. They were very good, and they reminded me that I probably need to throw a drugstore chain's stock in my core portfolio as a long-term play on the increasing health-care needs of the baby boomers (and every other demo, for that matter).
Looking through the reported growth rates, you can see that we're talking best-of-breed here. Revenues were up over 60%, and adjusted earnings per share increased over 18%, coming in at $0.55. The Caremark merger has obviously proven to be a good move. Same-store sales rose 3.9%, benefited in part by the early appearance of Easter in March.
According to earnings.com, CVS Caremark basically matched earnings expectations. That's okay, though, I don't think you can hold it against this big brand name. As of this writing, CVS is near a 52-week high. Buying at the 52-week high is always a dicey thing, but if you plan on holding for years, it wouldn't be that much of a concern. Shorter-term traders would need to wait for a pullback. But I like the first quarter results for CVS, and I think the stock is poised to do well over time. And like I said at the beginning, this really may be a stock for the core portion of an individual's investment program -- a true buy-and-hold idea.
Disclosure: I don't own shares in any company mentioned here; positions can change at any time.
With the current challenging market conditions probably many of us are wondering which are those reliable stocks that could offer us a big profit in the next coming years. In the light of those questions, Gene Marcial's new book, 7 Commandments of Stock Investing, reveals his perspective over seven stocks that are considered to be worth buying and holding for the next seven years (check out BusinessWeek's slideshow of his seven picks).
Taking advantage of the experience he gained over the past 30 years, BusinessWeek's Gene Marcial shares his opinions related to investors' strategy to use market meltdowns for their own benefit, being able to turn the stock market panic into success.
This post is part of our Battle of the Brands feature. Let us know which brand you prefer, and check out other Battle of the Brands posts.
CVS Caremark Corp (NYSE: CVS) -- with 6,200 stores and a pharmacy benefits management division -- beats Walgreen Co. (NYSE: WAG) -- with 5,997 stores -- hands down in the battle of the brands. It's bigger, its earnings are growing faster, it has a higher P/E and its stock has grown faster over the last year and five years. Walgreen wins on one measure: it has a fatter profit margin.
Regulators Zero in on Credit Card Reform Federal regulators are pushing ahead to stop abuses by credit card issuers at a time when the $2 trillion industry has come under increasing scrutiny. Regulators zero in on credit card reform - CNNmoney
Rite Aid (NYSE: RAD), I should disclose, is one of my least favorite companies and stocks. Nevertheless, I don't mind checking in on it from time to time when there is news about it. Yesterday, the pharmacy released sales data for the month of March (the data excludes the Brooks Eckerd acquisition). Did they change my outlook on Rite Aid at all?
No, although I should say that this wouldn't be necessarily expected; a month of same-store sales data isn't the killer app of an overall investment thesis for a retail idea. Still, shareholders follow comps religiously, and I have to say that Rite Aid's number was nothing to write home about. A 2.6% gain in sales at stores open more than a year is weak. Walgreen (NYSE: WAG) said earlier in the week that its comparable-store revenues grew by a much better 4.4%. Walgreen was able to take advantage of the Easter shopping excitement in a much better fashion than Rite Aid. It all comes down to brand and execution; Walgreen, as well as CVS Caremark (NYSE: CVS), are more valuable in terms of both those attributes.
I may not have been bowled over by Walgreen's recent earnings release, but I can tell you that Rite Aid's share price is downright frightening and telling -- it's telling people to stay away, or at least understand that it may be essentially like buying a lottery ticket (it closed at $2.89 yesterday). Rite Aid's same-store sales were weak, and so is its investment potential.
Disclosure: I don't own shares in any of the companies mentioned here; positions can change at any time.
Luqman Arnold, the former UBS AG (NYSE: UBS) president forced out in 2001, wants the firm to split its investment bank from the private client bank, and look at selling the investment bank and asset management business, according to the Wall Street Journal's "Heard on the Street".
The Financial Times reported that the landmark merger that created Citigroup Incorporated (NYSE: C) was a "mistake" that failed to benefit the financial services giant's investors, customers and employees, said John Reed, who masterminded the $166B deal with Sandy Weill in 1998. Reed, the former head of Citicorp, has advised Citigroup CEO Vikram Pandit at least to consider spin-offs, sources said.
WEB SITES:
Walgreen Co (NYSE: WAG) is branching out by acquiring two companies that provide health-care services, BusinessWeek reported, following in its competitor CVS Caremark Corporation's (NYSE: CVS) shoes. Some investors are wary of Walgreen's move, but Mark Wiltamuth of Morgan Stanley sees it as a new growth avenue and as a push into services complementary to drugstores.
Walgreen Company (NYSE: WAG) reported earnings for the second quarter on Monday. Net sales grew by a very decent 10%. Diluted earnings per share for the quarter were $0.69 versus $0.65 in the year-ago period; this represents a bottom-line gain of 6%.
Considering some of the other action on Wall Street on Monday -- the increased offer for Bear Stearns, the approval of the Sirius/XM merger -- Walgreen's earnings report was simply an okay event, even though the stock closed up around 5% on the news. Same-store sales may have increased 4.7%, but the retailer sold a lot of items with lower margins this time around, thus reducing its gross-margin metric by 14 basis points (the release did cite a big shift to pharmacy sales in the quarter as having negatively impacted margins). So Walgreen needs to work on its non-pharmacy revenues. One cool thing from the report is the jump in net cash from operations -- that number increased by 10%.
Walgreen, which competes with CVS Caremark Corporation (NYSE: CVS) and Rite Aid Corporation (NYSE: RAD), isn't a bad way to play the long-term drug-retailing business. To be sure, baby boomers -- as well as everyone else -- will always need to visit drugstores on a go-forward basis. It's the company that can capture a significant amount of non-pharmacy sales that will prosper the most. Walgreen and CVS are excellent brand names in this sector -- I'm not so keen on Rite Aid, though (take a look at the stock price and see if you think the company might be cheap-for-a-reason, as they say).
Disclosure: I don't own any shares in any of the companies mentioned here; positions can change at any time.
I love going to the drugstore. Whether it's CVS (NYSE: CVS) or my neighborhood Walgreen (NYSE: WAG), I love the convenience of being able to buy everything I need and everything I don't need in one place. I buy lots of Entenmann's donuts, toothpaste, and school supplies at my local store. And now, I may be able to get a flu shot at the store as well.
The New York Times ran an article today entitled "Should Pharmacists Give Flu Shots?" It seems New York City has been suffering from increasingly bad flu seasons. To combat such breakouts, the city is now attempting to pass a bill allowing pharmacists to give flu and pneumonia shots.
The same article quoted the Department of Health as saying that influenza is "now widespread in New York City, with more than 1,000 flu-related visits to emergency rooms each day. Some 20 percent of the current flu vaccine supply is unused."
I feel my local drugstore is competent to sell me nail clippers and gum, but do we really want these stores dispensing medical services?
Zack Miller is the managing editor of IsraelNewsletter.com and a former equity analyst for a leading multinational hedge fund.
Chattem (NASDAQ: CHTT) provides over-the-counter drugs, personal care products and dietary supplements. Offerings include such pain treatments as dental analgesic Benzodent, topical analgesic Aspercreme, muscle pain reliever Flexall, menstrual symptom reliever Pamprin, analgesic Icy Hot and itch medicine Cortizone-10. The company also makes Melatonex and Unisom sleep aids, Gold Bond medicated powder, Selsun Blue dandruff shampoo, ACT mouthwash and BullFrog sunblock. Chattem sells its products in eighty countries, through such merchandisers as CVS Caremark (NYSE: CVS), Safeway (NYSE: SWY) and Walgreen (NYSE: WAG).
The company surprised investors last week, when it reported Q4 EPS of 76 cents and revenues of $100.6 million. Analysts had been expecting 65 cents and $100.5 million. Management also guided FY08 EPS to $4.00-$4.20 ($3.83 consensus).
MOST NOTEWORTHY: The Retailing Broadline Sector, Mips Technologies and Alliance Data were today's noteworthy upgrades:
Deutsche Bank upgraded the Retailing Broadline Sector to Neutral from Cautious and believes the worst is over for the retailing sector. The firm recommends long Buy rated CVS Caremark (NYSE:CVS) and Wal-Mart Stores (NYSE:WMT) vs. short Sell rated SearsHolding (NASDAQ:SHLD).
B. Riley upgraded shares of Mips Technologies (NASDAQ:MIPS) to Buy from Neutral on valuation, as they find the risk/reward attractive at current levels.
Alliance Data (NYSE:ADS) was raised to Outperform from Market Perform at JMP Securities following its strong Q4 report and guidance.
OTHER UPGRADES:
Roche (RHHBY) was raised to Overweight from Neutral at HSBC.
Bear upgraded Nordstrom (NYSE:JWN) to Outperform from Peer Perform.
TheStreet.com's Jim Cramer says that now, teetering financials and homebuilders will topple and safety plays will rule. Ouch.
Couple of tough days ahead. We were overbought going into this Fed decision; now we will have to pay for it, and pay for it big. We have to lose a lot that we gained, expecting that the Fed would work hand-in-hand with the Treasury Department to get us out of this jam.
But that's not going to happen now. You can see what will happen. They will kill the banks again. The fundraising that was going on will be halted. We will get some failures. The homebuilder credit lines? Some will not be extended.
CVS Caremark (NYSE: CVS) is no longer looking for new acquisitions, but rather will focus on assimilating recent acquisitions, Chairman and Chief Executive Thomas Ryan said on Wednesday. While speaking to the Reuters Health Summit in New York (check out the blog for the conference here), Ryan said, "It's most important that we stay focused on the integration, the execution and getting our balance sheet in order, and then we will have the opportunity to look at opportunistic acquisitions."
CVS acquired giant pharmacy benefits manager Caremark in March and continues to integrate recent drugstore chain purchases.
It sounds like the company has its hands full given the amount of M&A work CVS has done over the past couple of years combined with the organic growth the firm is seeing. While fierce competitor, Walgreen (NYSE: WAG), is considering applying the brakes in terms of opening up new doors, CVS is in full-throttle mode right now.
Every three years the Federal Reserve Board conducts a national survey that tracks the financial health of American households. Believe it or not if you and yours are bringing in $40,000 a year, you're doing better than half the households in America. Which of the six level of the income parking ramp and net worth parking ramp do you fall into?
Breakaway Brands: TJ Maxx More Buzzworthy Than iPod & BlackBerrry?
Landor Associates' annual Breakaway Brands ranking is a comprehensive survey that measures consumer sizzle over a three-year period. These are the brands with most momentum in America. The brand that topped this year's list isn't iPod which ranks second or BlackBerry which ranks third, but TJ Maxx who expanded clientele with higher-end jewelry offerings. Other brands with buzz include Stonyfield Farm, Samsung, Costco, Propel, Barnes & Noble and two old giants that have generated new buzz recenty, GE & Microsoft.
CVS Caremark
With the current challenging market conditions probably many of us are wondering which are those reliable stocks that could offer us a big profit in the next coming years. In the light of those questions, Gene Marcial's new book, 7 Commandments of Stock Investing, reveals his perspective over seven stocks that are considered to be worth buying and holding for the next seven years (check out BusinessWeek's 
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TheStreet.com's Jim Cramer says that now, teetering financials and homebuilders will topple and safety plays will rule. Ouch.
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Nordstrom and Kohl's post smaller-than-expected Q1 profit declines
