Shares of Walgreen Company (NASDAQ:WBA) are up today after the company announced earnings, posting a reasonable but not spectacular quarter. Profitability fell slightly due to a slower cold and flu season, and the company also experienced some headwinds on its generic drug business, a segment that the company is heavily dependent on. 63% of the company's sales come from prescription drugs, and of those sales, the generic drugs are more profitable than their big-name counterparts.
More broadly though, Motley Fool analyst Jason Moser discusses in the video below that while he sees the prescription drug business as a stable one in the United States, he doesn't see any particular competitive advantage that Walgreens has, that would bring consumers there instead of to a competitor. He tends to think that consumers will go to the closest pharmacy available to fill prescriptions, rather than seeing Walgreens as a destination that stands out above the crowd.
While the company has made some efforts to differentiate itself, Jason hasn't found them to be extremely compelling. The prescription drug business may generate stable sales, but for him, there are just better investing opportunities available today.
Jason Moser has no position in any stocks mentioned. Mark Reeth has no position in any stocks mentioned. The Motley Fool recommends CVS Caremark. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.