good time to add to Walgreen

I added to my position in the large US drugstore chain Walgreen (WAG) yesterday. I have held this position for a few years now and I saw the recent severe weakness in the stock as an opportunity to lower my adjusted cost base.

Walgreen is down over 28% year to date versus 6.5% for the S&P 500 index. The stock is trading at a 52 week low sporting a P/E ratio of 12.7x earnings and a price to sales ratio of 0.40. This is a low debt, high return on equity company who in my opinion is catering to the right demographic. Drug cycles etc. will always effect their profitability but in the long term they will reap the rewards of being a convenient choice for an aging population.