Walgreens: Why Public School Children Should Not Be Allowed To Invest In Stocks

Good Afternoon,

https://www.ibisworld.com/industry-statistics/market-size/pharmacies-drug-stores-united-states/

Good afternoon Readers,

Please note, I do not own stock in Walgreens. For those of you who have never valued a stock. What you are doing is valuing the company and then dividing it up into little parts called shares to get the price of the stock. You take the total value of the company and divide it by the number of shares. So the equation is:

Total Value Of The Company / # of Shares

Considering this, I cannot figure out the correlation between the share prices of CVS and Walgreens. When you look at Walgreens, public school children are buying shares that according to Yahoo have earnings per of each little part of the company losing 71 cents a share in an industry with little growth opportunity:

WBA shareholders are paying over fifty dollars a share for little bits of a company that is losing money in a saturated industry only growing at 1.8 % a year. They also have a negative tangible asset on their balance sheet.

When you compare this company to CVS, which according to Yahoo is selling for only thirty something more dollars a share. The correlation does not make sense. Even excluding the questions prevalent in CAPM equations that used to use BETA as a proxy for all risk a company supposedly faces, the correlation does not make sense.

CVS is not only profitable, but is earning over five and half dollars a share.

Please note I have a small position is CVS, but don’t like it.

Warmest Regards,