1. Walgreen earnings rise, but CEO ponders Switzerland move
In a conference call with analysts, the CEO mentioned that Walgreen is thinking about buying more shares of the European pharmacy company that it already owns 45% of. The Swiss drug store is called Boots, and if Walgreen owns a majority of it, then it can easily boot the U.S. taxman out its pocket and move its official headquarters to Switzerland. That would grant the CEO an office with a fine view of Swiss yodelers and a lower tax rate.
Buying a company to move your HQ is called "tax inversion." New York City-based Pfizer was trying to do that when it sought to acquire British-based AstraZeneca -- and that got the Walgreen CEO to thinking. When Walgreen bought 45% of Alliance Boots AG in 2012 for over $6 billion (probably for the lucrative Ricola cough drops so popular among downhill skiers), it maintained the option to buy the rest by 2016.
Buying out 55% of a company is a MarketSnacks-worthy story already. But the possible USA-for-Switzerland tax swap proposal (especially during the patriotic craze of the World Cup) puts an extra Wall Street spotlight on the news. Walgreen's stock performance has been really strong (up 26% year to date), but investors were mixed Tuesday on the surprising move, so they sent the stock down 1.7%.
Plus, according to the research firm The Conference Board and its monthly survey, consumer confidence rose again in June as Americans increasingly observe "better business conditions" nationwide. In particular, investors were happy to see optimists outweighing pessimists according to the polling.
The takeaway is that winter weather was an ice cream headache for both the housing market and consumer spending. Now that spring has sprung, the econ data is showing both areas of the economy regaining their recovery-leading footing, even if Wall Street didn't celebrate the news with a stock market win on Tuesday.
As originally published on MarketSnacks.com
Leaked: This coming device has every company salivating
The best investors consistently reap gigantic profits by recognizing true potential earlier, and more accurately, than anyone else. There is a product in development that will revolutionize not just how we buy goods, but potentially how we interact with the companies we love on a daily basis. Analysts are already licking their chops at the sales potential. To outsmart Wall Street and realize multi-bagger returns, you'll need The Motley Fool's new free report on the dream team responsible for this game-changing blockbuster. Click here now.
The article Solid Econ Data (and Even Walgreen Earnings) Not Enough to Save the Dow originally appeared on Fool.com.Jack Kramer , Nick Martell , and The Motley Fool have no position in any of the stocks mentioned. Try any of our Foolish newsletter services free for 30 days. We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.
Copyright © 1995 - 2014 The Motley Fool, LLC. All rights reserved. The Motley Fool has a disclosure policy.