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Chain Drug Store Buy: TFN 60-Second Buzz Video

Posted June 16, 2008

Chain Drug Store Buy: TFN 60-Second Buzz VideoRite Aid Corporation is now the third largest U.S. retail drug store chain.At $2 and change, shares for this stock (RAD:NYSE) might appear to be a bargain, but Rite Aid stock is not expected to turn around for at least another year. Krista Das has better suggestion…

Watch the video now!

Baltimore — (TFN): The following was take from the TFN 60-Second Buzz with Krista Das. Watch the video now.

Rite Aid Corporation, now the third largest U.S. retail drug store chain, behind Walgreens and CVS, acquired Brooks and Eckerd Pharmacies in October of last year.

At $2 and change, shares for this stock (RAD:NYSE) might appear to be a bargain. Add on to it the fact that the 5,000 plus store drug chain exceeded its year-end results by 40%, with fourth quarter sales growth at 50.5% and it seems like a no-brainer. Right?

Wrong! Rite Aid is still recovering from its acquisition of nearly 1,900 stores, with debt comprising 77% of its capital. A challenging economy, high integration costs, fierce competition, and management’s predictions for net income to drop further, makes it difficult to determine valuation. The stock is not expected to turn around for at least another year.

However, if you can’t wait that long and you’re still insistent on investing in Rite Aid, here’s a play that still remains a buy: Consider purchasing a corporate bond. The Rite Aid Corporation bond due August 15, 2013 holds an interest rate of 6.875%.

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Posted by Krista Das · Filed Under Featured Video, US Stocks and Markets, Videos 

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