Technical Analysis on GNC Holdings and Walgreen: Drug Store Stocks Set to Provide Good Returns

  Technical Analysis on GNC Holdings and Walgreen: Drug Store Stocks Set to
                             Provide Good Returns

PR Newswire

LONDON, February 11, 2013

LONDON, February 11, 2013 /PRNewswire/ --

Growing life expectancy is a good indicator of a nation's economic status, but
at the very same time it also brings about the higher incidences of diseases
and ailments. While the picture does not look pretty in general, it certainly
is an attractive one for drug store companies. With growing demand for drugs,
companies like GNC Holdings Inc. (NYSE: GNC) and Walgreen Co. (NYSE: WAG) are
all set to see their stock prices soaring. These companies are also looking to
expand their reach internationally. The sector also features competition, but
the pie is big enough for all the players involved. StockCall has posted free
technical research on GNC Holdings and Walgreen which can be downloaded upon
sign up at

GNC Holdings Continues on Growth Trajectory

GNC Holdings Inc. stock grew by 25 percent in the past 12 months and is
rightly being lapped up by hedge funds. As per a recent filing by Citadel
Investments, billionaire investor Ken Griffin now owns 3.5 million shares of
the company, which is almost the double of its initial investment in the
company. Alexander Mitchell's Scopus Asset Management also owns 2.5 million
shares of the company. Hedge fund interest generally bodes well for a stock.
The company holds leading position in nutrition and vitamins market. Sign up
and read the complimentary report on GNC Holdings at

Apart from hedge fund interest, the company is doing well. GNC Holdings
management upped its guidance for FY 2013. It is experiencing all-round growth
as all its major segments including franchise, wholesale and retail recorded
growth for FY 2012. The company has reported positive same-store sales growth
for 29 consecutive quarters. GNC Holdings runs 7,600 retail locations globally
and is active in 53 countries. With projected earnings growth of 22 percent
for next five years, the company offers good long-term investment opportunity.
For the third quarter of the year, GNC Holdings reported 28 percent increase
in its earnings. The stock trades at Price/Earnings ratio of 16.81 and thus is
not an expensive stock.

GNC is set to report its earnings today. Data were not available at the time
this article was completed.

Walgreen Offers New Product Lines

Walgreen Co. stock is on the roll and touched a new 52-week high lately. The
stock is up 23 percent in the past 12 months and offers a dividend yield of
2.66 percent. The company's dividend is likely to remain safe as it has
manageable dividend payout ratio of 45 percent. Walgreen is also projected to
grow its EPS at the rate of 13.23 percent in the coming five years. For FY
2012, the company grew its front end sales. However, its same-store sales
slumped marginally. The free report on Walgreen can be downloaded by signing
up now at

The drug store company is diversifying its offerings as it plans to sell
Televisa Consumer Products to gain traction among its Hispanic customers. It
is also expanding overseas as it acquired 45 percent stake in Alliance Boots
to gain foothold in Europe. The company spent $6.7 billion for this purpose
and expects the acquisition to add 23 to 27 cents per share to its EPS. Like
other drug companies, Walgreen also stands to benefit from increased life
expectancy, which will lead to higher demand for drugs and therapies. The
stock currently trades at Price/Earnings multiple of 18.57, which is slightly
higher than the multiple sported by its competitors GNC Holdings, but
Walgreen's future prospects justify the pricing.

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