By Pavel Kubarkov @ Shutterstock.com

Amazon announced yesterday that it is buying Pillpack. Pillpack is an innovative little company that pre-packages medicines for consumers who take multiple drugs regularly. The big pharmacy stocks predictably sold-off on the news that big-bad Amazon is entering their business, but there is much less to be concerned about than meets the eye.

Selling prescription drugs is much different than selling Amazon Kindles. A quick review of the Pillpack website shows that. It takes 10-15 minutes to even signup. There is insurance that needs to be dealt with, regulation, pharmacy benefits managers, and there is back and forth between doctors and pharmacies when drugs are prescribed.

And don’t forget about the competitive response Amazon is likely to face from this move. CVS is in the process of merging with health insurer Aetna. Guess which insurer probably won’t include Pillpack in their pharmacy network.

The share price performance of the two big pharmacies is unfortunate if you are a value conscious investor. The pharmacy stocks are among the most attractively priced in the market today. The market’s obsession with FAANG stocks has led to investor overreaction on every move the FAANGs make.

Take retail shares for example. The performance of the SPDR retail ETF over the last twelve months is instructive. The SPDR retail ETF was down as much as 25% from its 2015 high (with many individual retailers down much more) on concern that Amazon was going to bankrupt every brick and mortar business in America. Sentiment on the sector was rotten last summer and fall, but from its lows of last year, the SPDR Retail ETF is up 30% with many individual retailers up much more.

Or take WW Grainger. Grainger is in the industrial supply business. They have a big online presence and Amazon is gunning for them. Grainger even had to cut prices to stay competitive. The stock was down as much as 33% last year during the height of the concern, but the shares have almost doubled since and now trade at a new high. And Amazon is a much more serious competitor to Grainger than it is to the big pharmacies.

Savvy, seasoned, patient investors might anticipate a similar sentiment reversal in CVS and Walgreens shares.