Upload
andres-cardenal
View
112
Download
0
Embed Size (px)
DESCRIPTION
Rite Aid is making impressive progress, both from a financial and operational point of view, the business is supported by strong secular tailwinds and considerable opportunities for growth at the company level. Besides, the stock offers abundant upside potential from a valuation point of view when compared against bigger and more profitable peers such as Walgreen and CVS Caremark.
Citation preview
3 Simple Reasons to Buy Rite Aid
1- The company is clearly making considerable
progress in terms of business turnaround and
financial performance
2- Long-term industry tailwinds and growth
opportunities
3- Rite Aid is attractively valued in comparison
to bigger peers such as Walgreen and CVS Caremark
Rite Aid is clearly moving in the right direction
- Store base restructuring
- Cost controls
- Increased focus on healthcare services
- Building customer loyalty
- Same-store sales increased 5% in April,
signaling strong demand
Source: Rite Aid
Source: Rite Aid
Source: Rite Aid
Source: Rite Aid
Industry tailwinds mean growing healthcare demand in the long term
- Aging population
- Generics wave and technological advancements of different kinds in the industry
- Broadened healthcare insurance coverage
Source: Rite Aid
Significant growth opportunities
- Store base expansion
- Wellness remodels
- Loyalty programs and discounts to gain customers and consolidate the company´s competitive position.
- Growing portfolio of pharmacy services
Net profit margin: moving in the right direction with ample room for continued improvement
Rite Aid is valued at a considerable discount versus CVS Caremark and Walgreen
Foolish takeaway
- Rite Aid is making a lot of progress over the last several years, both operationally and financially
- Strong secular tailwinds for the industry
- Growth opportunities at the company level
- The company still has room for improvement in terms of profitability when compared against peers such as Walgreen and CVS Caremark
- Higher profitability would merit a considerably higher valuation, so Rite Aid still offers substantial potential for gains
Our best pick for 2014 is positioned for explosive
gains, and you can learn more about it via our
special free report. Simply click in the link below.