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Amerisource shares jump on Walgreens buyout report

Amerisource shares jump on Walgreens buyout report

Although short interest has been cut in half from its early May peak, there are still 7.54 million AmerisourceBergen shares sold short - or 4.3 times the stock's average daily pace of trading.

The drugstore operator past year represented 30 percent of AmerisourceBergen's revenue and is its largest customer. The day began at US$13.35 but the price moved to US$12.75 at one point during the trading and finally capitulating to a session high of US$13.4.

Shares of Walgreens Boots Alliance Inc (WBA) opened at $68.29 on Wednesday. Looking at the other side of the coin, WBA traded as low as $63.82 in the past 52 weeks, and since then the shares have risen 7.27% or $4.64. The pharmacy chain already owns a roughly 26% stake in AmerisourceBergen, and the two companies purchase drugs together through a joint venture. (NASDAQ:WBA) is -10.79% below its 200-day moving average, providing a measure of resistance for long positions.

Alta Capital Management LLC grew its holdings in shares of Walgreens Boots Alliance Inc (NASDAQ:WBA) by 28.8% in the fourth quarter, according to the company in its most recent 13F filing with the Securities and Exchange Commission.

CEO Pessina drove the Walgreens-Boots Alliance deal and more recently agreed to acquire 1,932 stores from smaller US rival Rite Aid, partly in a bid to improve its ability to negotiate for lower drug costs.

Trend Direction of Walgreens Boots Alliance, Inc. Their average price target spell out an upbeat performance - a 26% and would give WBA a market capitalization of almost $85.03B.

The company's stock is now moving with a -ve distance from the 200 day SMA of approximately -10.91%, and has a solid year to date (YTD) performance of -5.96% which means that the stock is constantly adding to its value from the previous fiscal year end price.

The company's Average Earnings Estimate for the Current Fiscal quarter is $1.48, according to consensus of 14 analysts. (NASDAQ:WBA) yearly performance is -17.82% and net profit margin is 3.20%. The company had revenue of $30.74 billion during the quarter, compared to analysts' expectations of $30.39 billion.

The shares of Walgreens Boots Alliance, Inc. have decreased by more than -5.96% this year alone. This repurchase authorization allows the pharmacy operator to repurchase shares of its stock through open market purchases.

The value of a stock is ultimately determined by the amount of cash flow that the investors have available. Shares repurchase programs are generally an indication that the company's leadership believes its shares are undervalued.

The company also recently declared a quarterly dividend, which will be paid on Monday, March 12th. The ex-dividend date is Wednesday, February 14th. This represents a $1.60 annualized dividend and a dividend yield of 2.34%. The acquisition was disclosed in a legal filing with the Securities & Exchange Commission, which is accessible through this link. Walgreens Boots Alliance's dividend payout ratio (DPR) is presently 44.20%. SSRM's institutional ownership was registered as 55.90% while insider ownership was 3.30%. (WBA) recently closed with fall of -8.56% to its 20-Day Simple Moving Average. ValuEngine lowered Walgreens Boots Alliance from a "buy" rating to a "hold" rating in a research note on Friday, February 2nd.

The deal could also be Walgreens response to the potential of online retailer Amazon entering the pharmacy business. The Company is a global pharmacy-led, health and wellbeing enterprise.

Analysts said any deal would not be a surprise, but it might cost Walgreens opportunities down the line as the company tries to keep pace with rival CVS Health.

Want to see what other hedge funds are holding WBA? The Company's products are marketed under a number of brands, which include No7, the Botanics range, Almus (generic medicines), Boots Pharmaceuticals and Soap & Glory (bathing and beauty brand).


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