RAD up even after negative article. Does this mean the bottom for RAD?
stockcharts.com[h,a]daclyiay[pc50!c10!f][vc60][iut!Lp14,3,3!Lc20]&pref=G
Snip:
So the company is struggling, but what about the stock? Priced at less than $5 a share and with $16.6 billion in sales last year, maybe there is some value there, right?
Wrong. When Duane Reade announced it was being bought last December at 10 times enterprise value to estimated EBITDA, the industry benchmark, Rite Aid shares quickly traded up to 9.5 times EV/EBITDA. But the stock has since declined to 7.8 times EV/EBITDA, in line with industry leader CVS, which has grown sales at close to 11% over the past five years, more than double the rate of growth turned in by Rite Aid.
With no catalyst on the horizon to spark top-line growth and limited capital to defend its industry position, another run-up in the stock price does not appear likely. Short interest represents only 2.9% of the float, limiting the impact a short squeeze could have, making this stock best avoided here at $4.64. And if you do own it, it is an ideal candidate to sell to raise some cash. There are better opportunities out there.
thestreet.com |
