juddmiller

Is Rite Aid Heading in the Right Direction?

Thanks for the article.

I love the Rite Aid story. Not only do I agree with all of your positives, but interestingly, I found four of your five "negatives" to be positives in my mind as well.

1. Acquisition costs/lower 2008 earnings (will keep the share price low while I continue to build my position)
2. Rite Aid is highly leveraged (Rite Aid has been doing an excellent long-term job of reducing their debt, demonstrating consistent discipline and effective management)
3. Faces acquisition risks (Wow, this to me is a nice upside. If Rite Aid doesn't increase it's own multiple through earnings, it could be taken over, which would be a nice bump to the stock. I'll take the cash either way.)
4. Still a turn around story, will have to turn around Eckerd (Their experience turning around Rite Aid makes them an excellent turnaround team for Eckerd, though integrations (separate from turn-arounds) always have unknowns)

I accept that Rite Aid is a speculative buy, but I am very, very bullish on Rite Aid. I'm in a long-term acquisition stage with Rite Aid now, and while I get a quick flush of joy when its stock nudges upward, actually it bums me out, because I'm not done filling up the truck.

-- Hotwheels71 (long Rite Aid, and looking to get longer)