January 1, 2012 Comments

Walgreen Company inc., the largest U.S. drugstore chain is updated and rated (higher) Buy at $33.06. It’s price has dropped to quite an attractive level due to the loss of about 5% of its customers who are covered bor drugs through a drug plan management company called Express Scripts. Walgreen refused to lower its prices sufficiently for express scripts but feels this was best for Walgreen and it believes it can win back many of the customers. It may be an opportunity to buy a great company at a time when it has been somewhat wounded. I may buy some shares.

eBay is updated and rated Weak Buy / Hold at $30.33. This company is a sort of toll booth collecting fees on everything sold on eBay as well as fees for payments with PayPal. Both auction sites and payment systems benefit from “first-mover” advantages whereby an incumbent has competitive advantages and it is difficult to compete against an incumbent. Given these characteristics eBay could be considered as an investment. Personally I am bothered by its attitude toward stock options and would not buy unless the price were more compelling.

Happy New Year. Our Performance for 2011 has been updated. It was not a great year in the markets but we did easily beat the the market for the 10th year out of 12.

I feel good about the selection of Buys and Strong Buys (in the table above) as we enter 2012. World financial conditions could certainly throw a wrench into he works. But that is always the case. Stocks tend to be unpredictable in the short term but tend to do well over the long term. And if one can manage to hold better than average stocks then, all the better.

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