Let’s talk about Rite Aid (NYSE:RAD).
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I've been waiting for the dust to settle on this thing. I love the risk-reward dynamic here, and I think it has finally shifted.
Last time I was in it we lost money, we were stopped out last time around $6.25, but the time before that we doubled our money. I still believe the Street overreacted last time the company reported, and I would still say it is higher-than-average risk because the Street is so negative about it.
Remember it had an accounting scandal a long time ago. That being said, the company in my mind is poised to grow at more than twice the rate of its peers... in the meantime, the shares are changing hands at really crazy metrics. Forward PE ratio 13 and PEG 0.44.
I'm looking for it to get back to that $6.25 mark, and longer term I cannot see this not being an $8 stock. It’s not a trade, I do like it long term. At this point it’s volatile and greater than average risk.