Use Weakness as an Opportunity in Pharmacy Stocks

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Trader Gregory Rowe works on the floor of the New York Stock Exchange, Monday, Feb. 24, 2020. Stocks are opening sharply lower on Wall Street, pushing the Dow Jones Industrial Average down more than 700 points, as virus cases spread beyond China, threatening to disrupt the global economy. (AP Photo/Richard Drew)

Keep an eye on drugstore stocks.

At the moment, CVS Health (CVS), Walgreens (WBA), and Rite Aid (RAD) are getting knocked down on speculation Amazon could open brick-and-mortar pharmacies.

However, discussions are only in exploratory stages.  Plus, even if Amazon wanted to move forward, it could take up to a year for stores to open. In short, investors are overreacting to an idea that may or may not happen a year from now.

According to CNBC, “An Amazon spokesperson wasn’t immediately available to comment on the report to CNBC. The company declined to comment to Business Insider on its interest in opening retail pharmacies and said it is focused on its at-home delivery business.”

With discussions only in early stages, I’d use weakness in pharmacy stocks as an opportunity.