Good news everyone!
I wanted to preface this by saying this lovely stock RAD or Rite-aid has been doing some gangbusters and has garnered some community attention over the past couple weeks! I want to write as a DISCLAIMER that this is not Financial Advice and is a DD on Rite-Aid or $RAD. There is a lot of information in this DD that will be summarized to best break down what this stock is about, and what the community sentiment is, and why they feel the way they do.
Disclaimer on top of Disclaimer, “This is not financial advice”, and should not be indicated as financial advice. this is to just show you support on why this stock is in the position it is in, what people are looking into about this stock, and my personal support for giving this information to you, the people.
What is RAD?
Rite Aid Corporation is an American drugstore chain based in Philadelphia, Pennsylvania.[9] It was founded in 1962 in Scranton, Pennsylvania, by Alex Grass under the name Thrift D Discount Center. The company ranked No. 148 in the Fortune 500 list of the largest United States corporations by total revenue. In late 2015, Walgreens announced that it would acquire Rite Aid for $17.2 billion pending approval. However, on June 29, 2017, over fear of antitrust regulations, Walgreens Boots Alliance announced it would buy roughly half of Rite Aid's stores for $5.18 billion.
What is happening to incur price action?
The following articles have been posted within the last few months and has built up to a big catalyst to come.
https://www.insidethefalseclaimsact.com/controlled-substances-act-false-claims-act-collide/ Rad is petitioning to have a dismissal on a case, and if they fail may end up paying for it by filing for chapter 11 bankruptcy.
https://seekingalph@.com/article/4616059-rite-aid-ch11-bankruptcy-risk-opioid-liabilities
RAD had been trying to improve their image since 2020 by opening a new line of stores, this was called “Stores of the future” This was to rebrand, and change the way Rite-aid was looked at, this concluded with a “nothingburger” https://www.fiercehealthcare.com/tech/rite-aid-unveils-new-strategy-revamped-stores-as-it-competes-cvs-walgreens
Announced Nov. 9 2020, this initiative was focused on revamping the brand and stores into healthcare “destinations”. Seems to have been sidelined in management shuffling, mentioned in corporate reporting as recently as Q1 2023. Investor news release has been removed from Rite-Aid’s investor relations page.
In addition, they attempted a broad movement towards offering more clinical services and less retail, offering online services, and including the store of the future initiative.
https://drugstorenews.com/2020-pharmacy-innovator-year-rite-aids-rxevolutionary-new-approach
To try to bump up customer traffic, they are also once again doing Flu and RSV vaccines at ALL locations, this might help boost q3/q4 for this year on their earnings, but they are so deep in the red, and with lawsuits they will keep bleeding out till a buyout/bankrupcy happens.
In addition, they are closing down multiple stores this year, and have the last few years due to money hemorrhaging.
Rite Aid, which has 2,300 stores across 17 states, said Thursday that fiscal 2024 losses would be worse than a forecast unveiled earlier this year with a net loss “expected to be between approximately $650 million and $680 million.”
On a positive note, if they are able to fight back bankruptcy, the play can change to a more positive one instead of a grim one via bankruptcy.
https://finance.yahoo.com/news/rite-aid-rad-stock-bounce-145000274.html?guccounter=1
It also made partnerships with Amazon and Instacart for home delivery; DoorDash to offer same-day delivery of non-prescription health, convenience and wellness essentials; ScriptDrop to expedite the prescription delivery process; and Shipt to provide same-day delivery of health and wellness products to Rite Aid’s retail footprint across 17 states.
Rite-aid has been launching a lot of initiatives to try and provide more support to their revenue, and improve.
Rite Aid collaborated with Afterpay to offer the service of shop online and pay later. Also, Rite Aid launched its loyalty program, Rite Aid Rewards, to expand its customer base to improve customer engagement in pharmacy and front-end sales.
Here is a image of the market cap compared to it’s competitors and it makes you raise an eyebrow on what’s going on with this stock.
https://i.imgur.com/RR4TdWL.jpg
This stock has even got the attention in the last couple days via WSJ or Wall Street Journal. https://www.wsj.com/articles/tupperware-yellow-rite-aid-meme-stocks-soar-c31cf56f
The Motley Fool: https://www.fool.com/investing/2023/08/04/why-shares-of-rite-aid-soared-this-week/
and
MSN News: https://www.msn.com/en-us/money/markets/why-shares-of-rite-aid-soared-this-week/ar-AA1eNwdP
Charts:
Currently as of this writing, rite-aid is up a whopping 65% over the past week. 72.90 percent over the past month. The Above articles show information for Friday and other positions this past week.
Positions:
To show my confidence in this stock, I have included a sizeable portion at 2.32 or almost 15k in shares. https://i.imgur.com/SrwX7FA.png
Conclusion:
A word of warning if, for whatever reason, not at all based on anything I have said or told you, you decide to join this trade, please be prepared for an influx of shorting, as some individuals have been trying to put pressure on this stock to keep the stock from pushing up any further than what it has. Any money you include can be gains, but as always please exercise caution, no matter the upside or downside.
[link] [comments] https://www.reddit.com/r/stocks/comments/15j6wy3/due_diligence_for_riteaid_stock/
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