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Rite-Aid climbs 9% on Dec. comps; Deutsche: Rite-Aid may be taking share

  • Rite-Aid (RAD +8.5%) shares continue an ascent sparked by strong Dec. comp sales numbers.
  • Deutsche Bank's George Hill, who reiterated a Buy rating and PT of $7, believes the numbers are indicative of Rite-Aid's progress on store remodels and closings of less productive locations.
  • +2.9% in overall Y/Y growth was dragged by a 2% Y/Y decline in prescription count, which Hill attributed to a decrease in flu-related prescriptions and shots.
  • The jury is still out on whether "Rite Aid is taking share [from other drug retailers], possibly indicating more promotional pricing at Rite Aid," the analyst observes.
  • Walgreen WAG +0.2% and CVS +0% are close to neutral on the day.
Comments (8)
  • popeye305
    , contributor
    Comments (257) | Send Message
    Yes, and add slow progress in customer service, more notably observed at the Wellness stores. There still remain too many stores which show little multi-year improvement in customer service matters, because they remain unidentifiable to Corporate, since training at the regional level, let alone store level, remains non-existent no matter what Corporate chooses to tell it's shareholders. Closing mismanaged stores is not necessarily the answer; bringing in competent management is, although this writer understands that some stores for various reasons need to be closed. But how does Corporate intelligently tell the difference? How about dealing with the management issues first, then make the wise decision. Full court press to work on these issues means the current stock price has tremendous room for improvement. This assumes Corporate takes this long outstanding issue seriously, and if they do watch out CVS and Walgreens. Actually, also watch out Rite Aid, because if you fail to work on this, a suitor may come knocking at your door. So, I believe Rite Aid shares are now in a sweet spot, with lots of upside and much less downside. Just an opinion.
    3 Jan, 01:52 PM Reply Like
  • dictionshunary
    , contributor
    Comments (160) | Send Message
    Fortunate to have jumped in at $1.59 and looking for close to double digits in 2014. Local store is not my preference because Walgreen and CVS both have bright new shiny stores and RAD is dull and old. But something must be working in areas other than here in NH.
    3 Jan, 02:40 PM Reply Like
  • cjandshilo
    , contributor
    Comments (13) | Send Message
    Hi Dictionshunary,
    If are a Shareholder of RAD go to your local dull and old Rite Aid in NH. and show them what You wrote in the Seeking Alpha comment. I am sure they will be open to sugestions. I mean after all if you own some RAD shares You also own part of that store. And while You are there why not switch Your Scripts and pick up some stuff for around Your home,they have some really great sales.And remember shopping at Walgreen and CVS does not increase the value of Your Rite Aid shares.Just some food for thought,O, and they also sell convenience foods.
    Pat Regan
    Throop Pa.
    8 Jan, 01:01 PM Reply Like
  • dictionshunary
    , contributor
    Comments (160) | Send Message
    Change has to come from the top. Think POTUS . Talking with a local store "manager" is like talking with a government staffer.
    9 Jan, 08:42 AM Reply Like
  • Jbgoose
    , contributor
    Comments (1008) | Send Message
    In my experience, the store manager is trained by those ultimately tasked with such a function, anyhow it is all directed by those in exec level HR. They should hire an upper level that is versed and trained to then hire a level down with proper support ability to delegate mission AND must also be capable to provide said support. Anyone who thinks they have a friend in HR is just kidding themselves.... POTUS - I'm easy to track .... and have some amazing, experienced ideas honestly. I expressed them to a non POTUS yet direct report circle. I 'assume' if the person got what I said they would take credit for said idea or direction for career and ditch me. But I know who it is and have an eye out FWIW.


    Having been in an exec level circle just once removed from a POTUS circle, and with different HR direction; mission of course, from the 'POTUS circle' at a F100 fir. The main POTUSand support circle job is travel and speeches to the street if public, to provide the presentation ovr and over, driving home the direction for all other circles, public, PR, store development in this case, the financials.... That is why they have corporate jets, executive meets that are set up different depending on a particular circles motivation, HR function, culture )
    9 Jan, 08:56 AM Reply Like
  • Jbgoose
    , contributor
    Comments (1008) | Send Message
    Popeye: can you lay out an example of a five point plan you would consider possible given the current issues sought to correct? Include the cost v benefit in terms of PPS as that would be most helpful.


    You say 'sweet spot' and up from here - I still forsee an intraday shot under 5 as a wild guess due to some unknown macro issue that is bound to occur... /


    Do you think its more 'ripe' for a geographic sell off or a share dilution, now?
    You know I don't guess on these events nor advise but do know either is possible as everything is available for the right price as they say....


    Cheers/ and agreed in theory but we've hashed this out plenty. Thank you.
    3 Jan, 04:13 PM Reply Like
    , contributor
    Comments (21) | Send Message
    Add George Putnam who writes the Turnaround Letter to those that think this is a good buy. I believe he has a buy up to $8.00 a share.
    3 Jan, 05:00 PM Reply Like
  • Jbgoose
    , contributor
    Comments (1008) | Send Message
    I do not provide guidance and must say seeking pro advice is certainly a smart idea for any investor, including pro's. I happen to think if they simply sold certain parts the stock could be 15, or they can dilute it for debt management again ( it's been said here) and provide another chance, lower, climbing into the 20's eventually, but why break 5? And who knows anything for sure as any misses, poor execution of wellness 65 (I fear this considering they have seminars coming up and nobody can provide the name of any expert for any topic - nor do they have cross sell nor proper equipment leasing in place for this) So- I agree it's up if executed and minus macro issues out of our control- just a shareholders opinion who has enjoyed this ride from well under a buck in and out many times currently in 2/3rds of last position at 2.9-94.
    9 Jan, 09:49 AM Reply Like
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