Rite Aid Corporation (NYSE:RAD) Hits The Undervaluation Note


Dallas, Texas 09/04/2014 (FINANCIALSTRENDS) – Rite Aid Corporation (NYSE:RAD) is a classic example in recent times of how and why share prices of perfectly balanced stock, suddenly hit the under value trend.

The drug store chain which has been under pressure in recent times due to weak sales, has been hit by the undervaluation button by analysts now.

As is typical of this industry, the drug store chain has been in the midst of a downtrend, which has not spared even larger-sized drug retailers in the country.

However, on the question of valuation, the under valuation argument does appear to be premature.

There are supporting arguments which illustrate that, not all is lost with  Rite Aid Corporation (NYSE:RAD) for it now has the ‘leverage’ that was so critical to its existing in the form of the new working and financial relationship with McKesson, the drug distributor.

Though RADs woes date back to the 2009 depression, when it reached the nadir at $0.22 per share, the turnaround has been markedly present in the recent quarters.

 Rite Aid Corporation (NYSE:RAD) now has the advantage of trucking with lead drug distributor, on the financial front as costs are now shelved on several aspects which were a drain on the drug retailer.

The latest quarter is definitely significantly in the argument against the undervaluation, given the revenue growth of 2.7% annually and the sales spike of 4.6%. The guidance for the third quarter is significant as well with margins now beginning to move northward due to Mckesson’s cost saving relationship.

With new look stores, the sales are brisk with prescription drug sales climbing to 1.2% average sales. As 225 more stores remodel the sales are expected to thrust forward, disrupting the negative undervalued theory!

This report is for information purposes only, and is neither a solicitation or recommendation to buy nor an offer to sell securities. Financials Trend is not-a-registered-investment-advisor. Financials Trend is not a broker-dealer. Information, opinions and analysis contained herein are based on sources believed to be reliable, but no representation, expressed or implied, is made as to its accuracy, completeness or correctness. The opinions contained herein reflect our current judgment and are subject to change without notice. Financials Trend accepts no liability for any losses arising from an investor's reliance on the use of this material. Financials Trend sometimes gets compensated up to one hundred and fifty thousand dollars per month for featuring particular stocks. See site disclaimer for complete compensation. Financials Trend and its affiliates or officers currently hold no shares of these stocks. Financials Trend and its affiliates or officers will purchase and sell shares of common stock of these stocks, in the open market at any time without notice. Financials Trend will not update its purchases and sales of these stocks in any future postings on Financials Trend's websites. Certain information included herein is forward-looking within the context of the Private Securities Litigation Reform Act of 1995, including, but not limited to, statements concerning manufacturing, marketing, growth, and expansion. The words "may", "would," "will," "expect," "estimate," "anticipate," "believe," "intend," " project," and similar expressions and variations thereof are intended to identify for ward-looking statements. Such forward- looking information involves important risks and uncertainties that could affect actual results and cause them to differ materially from expectations expressed herein. *Financials Trend does not set price targets on securities. Never invest into a stock discussed on this web site or in this email alert unless you can afford to lose your entire investment.