Well no one reads my posts...been bullish on RAD for the last 3 years...if you can go back 3 years for bigjimbig and also scotty410...you will see all my comments on RADs financial reports and how it's management has been cooking the books for 4 years and 3 quarteers to keep posting losses and running the stock into 22 cent a share territory, bofore it bounced back to 2.17...then down to 87 cents and now up to 1.95.
They had to post a profit, in the last quarter, or it would not be able to carry-forward for 7 years, billions in tax losses it took over the last 4 years and 3 quarters, er IRS regs.
For example took $2billion right off 2 years ago, for intangible...Goodwill, which is required by accounting rules too. y
Eckards take over caused the debt and then timing was just before the economy tanked too. Once RAD was $50.00 a share... 4 years ago at 6.00 Cramer liked it, but as it dropped to 2.00 he said pull the plug.
I kept averaging down...as saw it was consolidating warehouse, distribution, co-located stores, closing losing stores, meanwhile it has been opening new stores every year too, in better high volume locations. In some stores it has deal with stop and shop type chain and has partner with them in some RAD stores. It started a loyalty program finally last year and now a wellness program. It just got better terms on its long term bonds/debt and cut costs in many areas and hired a frim that specializes in psych of store layout, placement, and ads to improve all sales. It has kept people it picked up from express scripts debacle...and more. Now look at article on Cardinal, on the news list...behind it Zack's rate RAD as Number 1 strong buy.
Cramer is looking at it again too. Some guy who was major share holder of Eckards, Jacque Costu (sp?) owns about 15 percent now, sold some last year and institutions have about 40 percent.
The guy who lent them most of the $6 billion, and just gave them better rates, is well respected too.
I've always maintained that the investment thesis for RAD is radically (sic!) different from WAG/CVS. Those are fundamentally stronger, dividend-paying equities and relatively safe, albeit less multiplicative in terms of returns. RAD is behind them because of the high debt load and lower operating margins. That said, it operates in the relatively benign US pharmacy segment (no international macro exposure), transparent top line (via monthly sales updates) and benefits from potential healthcare reform, introduction of high-margin generics and an aging population. It is a favorite pastime of sites like Motley Fool or Seeking Alpha to compare RAD with either WAG or CVS. That's an irrelevant apples-to-oranges comparison (comparing WAG to CVS makes more sense). RAD has eliminated threats of bankruptcy (Moody/Fitch upgrades), shown multiple quarters of improved EBITDA fundamentals and is a turnaround story. Rather than EPS comparisons, it makes sense to look at PRICE/SALES ratio at this stage and it is valued at 1/10th of its peers. There is no way the market can hold back an increasingly profitable firm with top line of ~ $25B but with market cap
The stock is a turnaround. They have $6 billion in debt and just earned their first qtrly profit in many mnay years. The current management has made great improvements, but it's risky. Wag makes money and always has.