A Drugstore Immune to Amazon?

Featuring Chad Morganlander

Chad Morganlander of Washington Crossing Advisors believes that Walgreens Boots Alliance is well-positioned to take on Amazon’s foray into drug retail industry. Chad lays out his trade in this interview with Brian Price. Filmed on July 2, 2018.

Published on
10 July, 2018
Topic
Trading, US Economy, Micro
Duration
10 minutes
Asset class
Equities
Rating
33

Comments

  • JD

    Joe D.

    18 7 2018 22:21

    0       0

    If people are going to change behavior, and go from local pharmacy to online sales, it's likely greased with promise of better prices (maybe promotions, or bundling with care services?). If AMZN doesn't offer a better perceived pricing, then CVS AND WALGREENS will be able to hold on much longer. It would be interesting to see net contribution from non-pharmacy at all the brick and mortar stores, and what the operating margin would be there.

  • KB

    Keith B.

    11 7 2018 23:33

    2       0

    Sometimes a reality check is what the doc ordered. WBA has ~$130bn of sales, CVS has ~$185bn of sales, WMT and other groceries have ~$$$bn of pharmacy sales and independents have another ~$$$bn. Frankly, it’s beyond me how anyone can seriously think that AMZN with no pharmacy sales (ex. certain medical devices), before acquisition of a mail order pharmacy with ~$100m of sales, can do meaningful damage anytime soon, at least within most people’s investment horizons, let alone trading horizons. WBA and other pharmacies may have 99 problems, but the AMZN ain’t one.

  • NI

    Nate I.

    11 7 2018 04:12

    0       0

    Note to C M. There is nothing (except regulation - for the time being anyway) stopping Amazon from making a pharmacist available via video or phone chat. Costs will win out, as they always do, and force government to relax regulations that impair telemedicine.

  • FH

    Frank H.

    11 7 2018 01:39

    1       0

    I would be nice to know why he doesn’t own it personally. Is it bc firm or SEC rules or just not true believer.

  • SS

    Sam S.

    10 7 2018 19:25

    3       1

    Way too much "maybe, what if, hopefully, etc." Any company can get better "if" things happen. Not going to bet on this thesis. Drug Mfg's I'm sure will be doing huge volume deals with Amazon. Scripts are down because it's all TOO expensive and so many drugs are being withdrawn or limited for doctors to prescribe. Chad is an excellent speaker, but I don't agree with hope as being the best strategy. I'll find something else to get hooked on.

  • MC

    Minum C.

    10 7 2018 16:00

    1       0

    I like this guy's methodology and approach. Hard to be a value investor today with all the mania stocks taking over, but this guy looks like he's been around long enough to come out of the other side smelling like roses. WBA will probably work out well for him over his stated time horizon.

  • KJ

    Kulbir J.

    10 7 2018 10:56

    2       3

    I totally disagree with Chad's last 2 trade idea recommendations including this one (previous one on Starbucks).

    Amazon will crush Walgreens. Amazon can utilise its expertise to provide similar in-store services Walgreens can in its Whole Foods stores. They will also put downward pressure on Walgreen's margins.