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Strategies & Market Trends : Cents and Sensibility - Kimberly and Friends' Consortium -- Ignore unavailable to you. Want to Upgrade?

To: j.j. jingleheimerschmidt who wrote (47821)	12/19/1999 5:49:00 AM
From: puborectalis	Read Replies (1) \| Respond to of 108040

MIMS....pharmacy play.as prescription business improves........Signs of Better Health for Drugstore Stocks Issue in Depth The New York Times: Your Money Forum Join a Discussion on Investing By MICHELLE LEDER ne weakened stock can drag down an entire sector. And that may present opportunities. The recent performance of drugstore stocks is an example. This year, the Standard & Poor's Drugstores Retail Index has fallen 30.6 percent. The primary cause has been the Rite Aid Corp., the Camp Hill, Pa.-based chain whose stock dropped from $51.125 a share on Jan. 8 to $4.50 on Nov. 11, as a string of accounting problems came to light. Twice this year, the company has restated earnings reports. And on Oct. 18, Rite Aid's bank creditors forced out Martin Grass, then the chief executive. Through it all, investors have been selling other drugstore stocks, worrying that Rite Aid's accounting practices may be pervasive in the industry. Analysts contend that its problems were isolated. On Dec. 6, when Rite Aid announced that it had hired a new senior management team, some investors rejoiced: Rite Aid's stock rose 39 percent in one day. On Friday, Rite Aid closed at $13. But which drugstore stocks stand to benefit, now that some analysts say that the cloud over Rite Aid has begun to lift? "Investors saw Rite Aid burst into flames, but the only thing investors have to fear here is fear," said Mark Husson, an analyst at Merrill Lynch. "The biggest problem here is re-establishing upward momentum in investors' minds." Indeed, industry sales have been healthy. The Walgreen Co. reported a 14.8 percent sales increase for November at stores open at least a year; at the CVS Corp., the gain was 11 percent for the four weeks ended Nov. 20. Those chains, along with Rite Aid, have been opening stores at a furious pace in the last few years, competing for the title of America's largest drugstore chain. (CVS leads in number of stores; Walgreen is first in sales.) Drug retailers are also benefiting from demographic trends. The aging of the baby boomers is bolstering sales, as is the rising number of so-called lifestyle drugs like Xenical, for weight loss. And a rising number of Americans, now about 75 percent, receive prescription drug benefits, further increasing demand. MIMS looks very interesting......