Couple events affecting two companies I reccommended. Home Depot(HD) announcing a $3 billion stock buyback program. I take buybacks as management's confidence in the future of the company.Why? Because a management wouldn't buy back shares at a high price just for sake of buying back shares. Management buy back shares only when the stock price is a bargain.
On the other hand, Lowes (LOW)upgraded by Bear Stearns. I do not care about what analysts think but I thought I would throw it out there for those who might.
A couple of stocks im looking at in which you might want to take a look. Wal-Mart and Walgreen's are on my radar. First of all, I already own Wal-Mart (WMT) and has fallen to a level in which it's attractive again. Check out my post on Wal-Mart here.
Walgreen on the other hand has been beaten down for a while. The cause? Wal-Mart offering $4 prescription drugs. All the indicators that i look for in a company are there (ROA,ROE and FCF).The company also has a nice history of raising dividends. So what's stopping me? The P/E is 25. Historically the current P/E is low and does make it attractive. But I like company's trading at or below the markets P/E which if I recall correctly is 21. Wall Street is currently sold on the idea that Wal-Mart's program is going to crush Walgreen. History tells us that noone competes with Wal-Mart. Hold you horse cowboy. Walgreen's customers are very happy with Walgreen. Some customers have been going to Walgreen's for years and I doubt just because Wal-Mart is undercutting the competetion they will switch. Also, when people go for their prescription drugs they do not go for the lowest price all the time. People usually go to the nearest drug store for the sake of convenience. In addittion, the Walgreen family still owns a majority of the shares.
Again Walgreen is only a company im looking at and will be on my watch list for the next couple of weeks while I do a bit of microanalysis.
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