03-18-2015, 11:48 PM
(03-18-2015, 09:20 PM)Dividend Watcher Wrote: Trimmed WBA in both our portfolios today. With a trailing P/E of 40 and, even if earnings hit estimates, the forward P/E is in the mid-20s, I think I can either better the dividend stream or buy some back if there's a significant drop in the meantime. It's just above my desired allocation in both portfolios. If they do make a big acquisition this year, it could wreak havoc with estimates as they digest it -- especially if they pick up Rite Aid. Of all the drug stores out there, including the regional ones around here, it appears Rite Aids are the worst managed outfit and would duplicate locations of just about every Walgreens in our area. That's a lot of store closings and broken leases.
I'll just sit in cash for a short while as I survey the landscape.
I believe that trailing PE isn't taking into account one time adjustments to earnings due to the merger with Alliance Boots. The PE on 2015 earnings is about 24 and forward PE on 2016 estimates is 19.6. Still pretty high, but not so high that I am thinking about selling anything yet.