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Strategies & Market Trends : Strictly Buy and Sell Set Ups -- Ignore unavailable to you. Want to Upgrade?

To: Larry S. who wrote (2738)	3/11/2005 12:17:01 PM
From: - with a K	Read Replies (1) \| Respond to of 13449

RAD: made the most active list, I see. I like the way it has turned up with volume and passed its 21ema after a long base. Weekly: stockcharts.com[h,a]waclyiay[pc21!d10,1!f][vc60][iut!Lc20!Lah12,26,9]&pref=G Funny thing about RAD; I "met" Dabum here and on the Yahoo RIG board when he would conduct chart lessons using RAD as an example and I would post under "steadyinvestor." I also learned of the Sharpcharts site because of his RAD post and had bookmarked it so I would see RAD climb every time I opened the chart. It was one of his best LT calls ever, IMO. From under $2 to $6 plus, wasn't it? So every time I would open Sharpcharts there would be RAD, getting stronger every day, and I'd say, Damn this guy is good. I also found this snip from a Fool column earlier this week: CVS is doing better. Walgreen is doing much better. But let's not get overly concerned with the shining stars. Exactly how bad is Rite Aid's brand of bad? Is it possible that the stock is a value? I'm not sure I've got the answer to that, but there are encouraging signs for those willing to sort through the mess. Let's take that for granted and look deeper. With Rite Aid's enterprise value-to-sales ratio of 0.3, you'd have a tough time finding anything cheaper. But there's a good reason for that. Sales growth still stinks. Margins stink, too -- sort of. They are far below the numbers that peers are putting up, but look at the trend. Since 2001's disastrous -12.2%, net margins have improved steadily to 0.6% today. Not impressed? Hey, there's still room for improvement. Debt? There's a ton of it. But the firm has been working to pay it down and restructure it at better terms. It can afford to do that because it's actually churning up some decent free cash flow -- $452 million over the past 12 months, by my calculations. That yields an enterprise value-to-free cash flow ratio of around 12, which is also pretty inexpensive when compared with the market and its peers. None of this puts the stock on my personal buy list, but it ought to be enough to raise the eyebrows of anyone who likes to hunt for value. If Rite Aid can turn its sales around even slightly, or simply become a bit more profitable on the flat revenues, the current share price might suddenly look really cheap. That all said, I reenterd RAD myself.