August wasn't the kindest month for Walgreen Company (NASDAQ:WBA). Shares dropped 14% early last month after the nation's largest pharmacy retailer stunned investors by deciding against pursuing a tax inversion play with its acquisition of Alliance Boots. Over the first couple of weeks in September, though, Walgreen's stock moved up enough to give hope that better days could be ahead.

Can Walgreen shares rise even more in the near term? Here are three reasons the answer could be yes.  

Walgreen

Source: The Motley Fool

1. Movers and shakers 
Influential activist investors can help shareholders by stirring things up in publicly traded companies. Walgreen will now have two new board members fitting the activist investor label. Barry Rosenstein, managing partner of hedge fund JANA Partners, joined the pharmacy chain's board. Another director nominated by JANA Partners will also soon join Walgreen's board.

Rosenstein's comments noted in Walgreen's announcement no doubt pleased many who were dissatisfied with the company's decision to forego a financially advantageous inversion transaction. His pledge to be "a voice for all shareholders" and his eagerness to work with management to "help unlock greater value for shareholders" is music to plenty of ears.

Of course, the addition of the two JANA Partners board members doesn't mean that Walgreen will reverse its tax domicile decision. However, the presence of activist directors on the board could help increase the likelihood that future decisions will be more in shareholders' favor. For many, that's a step in the right direction -- and a reason to buy (or at least hold on to) Walgreen's stock.   

2. Boots kicking
The combination with Alliance Boots holds the potential to kick Walgreen to the next level. While Walgreen already owned 45% of Alliance Boots, it now truly becomes a global company. The addition should also help the bottom line.

Alliance Boots grew underlying profits by 18.5% year over year in fiscal 2014. Underlying profits are up 50% since 2011. That's strong growth, especially when compared to Walgreen's inconsistent earnings trend during the same period. 

Walgreen expects synergies totaling $1 billion by the end of fiscal year 2017. Investors shouldn't have to wait that long to reap some rewards from the combination, though. A big reason why is that Alliance Boots CEO Stefano Pessina will oversee development of the combined company's strategy going forward. If Pessina can bring some of the same magic he's wielded at Alliance Boots to Walgreen, shares should move higher in the days to come. 

3. Smoking the competition
Walgreen's stock could also benefit from an external factor. CVS Health (NYSE:CVS), the second-largest drugstore chain in the company, stopped selling tobacco products in its stores effective Sept. 3. That could potentially be a boon for Walgreen as well as Rite Aid (NYSE:RAD).

CVS made the decision as part of its strategy to transform into "a pharmacy innovation company helping people on their path to better health". It made for great publicity but comes at a hefty price tag. The company estimated earlier this year that dropping tobacco products would result in $2 billion lower revenue per year. 

For Walgreen, the CVS decision means that more customers could be heading its way. Many smokers who in the past had their prescriptions filled at CVS and bought their cigarettes there also might decide to instead take their business elsewhere. Walgreen will likely try to woo as many of those customers as possible to its stores. If it succeeds in doing so, better financial results could be around the corner -- and so could higher stock prices.

Broader perspective
Any of these three factors could help Walgreen's stock to rise in the near term. On the other hand, there are reasons to think the stock could fall further over the next few months. Short-term thinking isn't the best thinking, though.

Over the long run, Walgreen looks to be a solid choice for investors. Health reform, especially Medicaid expansion, benefits all of the major pharmacy chains. As the baby boomer generation ages, their use of prescription drugs will likely increase -- another plus for Walgreen and its peers. Walgreen also belongs to an exclusive club of companies that have increased dividends for 39 consecutive years.

Walgreen will need to make smart choices that benefit its shareholders to perform well over the long run. Recent actions like the addition of Barry Rosenstein to the board and putting Stefano Pessina in charge of strategy make me think the company will make those smart choices. 

Keith Speights has no position in any stocks mentioned. The Motley Fool recommends CVS Health. 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.