Out Fox The $treet

Walgreens fell by 8% following disappointing FQ3 results. The company was hit by higher cleaning costs and weaker U.K. Boots sales. The stock now offers a 4.8% dividend yield while trading at only 7x normalized EPS estimates. Walgreens Boots Alliance  (NASDAQ: WBA ) has too slowly transitioned to the digital realities of the modern retail environment, but the stock drop after  FQ3 results  was a clear overreaction. The quarterly results weren't as bad as the stock reaction for a stock already down about 20% from the previous highs. My  investment thesis  is more bullish on the stock following this dip below $40, as Walgreens Boots gets more aggressive with its digital plans and expands into more personalized healthcare services after a slow start. Read the full article on Seeking Alpha.  Disclosure: No position mentioned. Please review the disclaimer page for more details. 

As investors were warned,  Rite Aid (RAD)  was only going to head lower following the 1-for-20 reverse split. The company provided the following financial targets for FY20: Sales to be between $21.5 billion and $21.9 billion in fiscal 2020  Same store sales expected to range from an increase of 0.0 percent to an increase of 1.0 percent over fiscal 2019. Net loss is expected to be between $170.0 million and $220.0 million.   Adjusted EBITDA is expected to be between $500.0 million and $560.0 million.   Adjusted net (loss) income per share is expected to be between a loss of $0.01 and income of $0.04. These are not the numbers investors want to see in a competitive environment where  Walgreens (WBA)  and  CVS Health (CVS)  are already dealing with competitive impacts from  Amazon (AMZN)  entering the pharmacy space. The likelihood of Rite Aid recovering isn't very high. Avoid or short the stock that k...

Typically, a reverse merger is a sign of a company facing troubling finances, though I'll be the first person to tell investors that this isn't always the case. Each stock in the process of a reverse merger needs the merits of its individual case reviewed by an investor. In the case of Rite Aid (RAD) and Novavax (NVAX) ,  these reverse mergers are signs that these stocks face incredibly difficult times ahead and the stocks are likely headed even lower. Rite Aid got approval by shareholders for a reverse split that needs to happen by the end of June to cure NYSE requirements for a $1 listing. At $0.57, the stock would trade at $11.40 on a 1:20 split to take place on April 22. The problem is that Rite Aid continues to face more pressure from Amazon in the pharmacy space and stronger competitors that are already struggling. At a pric...

Following the announcement of a planned reverse split, Rite Aid (RAD) continues to fall further below $1. The company now needs to complete a 1-20 split in order to get the stock to $15 post split.

After the close, Rite Aid (RAD) announced the intent to vote on a reverse split at a special meeting on March 21. The stock trades below $1 and the company needs to regain compliance with the NYSE so the move isn't surprising.

Amazon continues working on initiatives to explore the pharmacy sector. CVS Health trades near multi-year lows in part due to the Amazon threat. The net payout yields offer a positive signal if the e-commerce giant isn't a problem. CVS Health  (NYSE: CVS ) continues to trade down towards multi-year lows as weak earnings and fears of  Amazon  (NASDAQ: AMZN ) entering the pharmacy space have weighed on the stock. The company though is raking in billions in free cash flow and returning that cash to shareholders, making the stock appealing on several metrics. Read the full article on Seeking Alpha.  Disclosure: No position. Please review the disclaimer page for more details. 

On Tuesday morning, Walgreen (WAG) had a very busy set of announcements with Q312 earnings, a dividend boost, and more importantly the purchase of 45% of Alliance Boots for $6.7B. In reaction, the stock suffered a decline of nearly 6% on a day when the stock market rose roughly 1%. Apparently the market wasn't very happy with some of the announcements. Let's review the details: The Deal The company announced a deal to buy 45% of Alliance Boots for $6.7B. The deal is expected to be accretive by $0.23 to $0.27 in the first year following completion of the deal. Read the full article at Seeking Alpha. Disclosure: No positions mentioned. Please review the disclaimer page for more details. 

Medco Health Solutions (MHS) is a leading pharmacy benefit management provider and a recent addition to the Net Payout Yields Portfolio (available from Covestor.com soon). How could an investor have predicted strong earnings and the incredible recovery in the stock of MHS from a low of below $44 at the end of August to the $57 current price in 2 months? Well, actually rather easily because MHS spent Q1 and Q2 buying some 8% of their outstanding stock. Management signaled that the stock was too cheap in the mid $50 range so why were investors so reluctant to buy in the $40s. Good question to us. During the last quarter they bought another 4% of the outstanding stock placing the Net Payout Yield at 12.7% based on current stock price. Or a nearly 17% annualized run rate since this total only factors in the last 3 quarters. During Q3, MHS bought back $903M or 17.1M shares of stock. The unfortunate news is that it appears management was unable to purchase shares in the $40s when th...