Rite Aids stock potential?

Question

I'd like to have some educated opinions on rite aids stock, where do you think its going, despite recent gains and losses, is this stock looking up or down in the months ahead?

Stock investors or educated guesses please.

Thanks all.

Answer 1

Well, Rite Aid is headquartered in my home town, so it gets a bit of coverage in our local paper.  The stock has been nothing but a disappointment since former CEO Martin Grass was indicted and thrown in jail.  The management teams since then have tried to get this company moving, but the debt has simply too much to overcome, and it has run into some legal troubles regarding sales practices of drug products over the years as well.  Sales have been disappointing, and in our area, it seems that CVS has better stores.  

The stock peaked at over $50 in 1999, and trades at just over $1.00 now.  This would purely be speculative money if you decided to invest in it, just like trying to win at the race track.  The stock of course could double from here, but it is actually down 80% this year and the trend still looks to be down.

There are thousands of other stocks out there to choose from.  Don't buy a stock like Rite Aid just because it looks cheap.  Its stock price is this low because it is just not a good investment.

Scott Cole

www.kungfutrader.com

Answer 2

I would avoid it.  Sure it may go up from where it is now, but it quite likely to go to zero.  The company has $6B in debt and only $150M cash.  They are forecast to lose more money over the next few quarters.  I think most people today are content to do all their shopping, including medicines, at Walmart or the local supermarket.  IMO, the only RiteAid stores that make sense are those in urban areas where people can walk to the store.  Competitors Walgreen and CVS are at least profitable.  Bottom line:  don't invest any more in RAD then you are willing to lose.