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Валгрин Ко. Message Board

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  • emt8601 emt8601 Jul 7, 2012 12:28 PM Flag

    Rite Aid stock much better buy than Walgreens

    Thanks for the response. Just a few comments. No need to take to the RAD board

    ****Much/most RAD debt has an escalator with changes to LIBOR ****

    Not true. 80% is at fixed rates (source 10-K).

    **** Either way, RAD just lost $378 M in its recently reported FY ****

    True, which is a loss of $0.43 per share. Current avg. analyst estimates are a loss of $0.15 per share for this FY and a loss of $0.08 for next FY.

    **** its current ratio was in a $2 B deficit ****

    Not true. RAD's current ratio is 1.7

    **** Tells me that MUCH borrowing lies in their future ****

    Not true. RAD has been free cash flow positive for the last 2 years and has provided guidance that it will be free cash flow positive for the current FY.

    **** and, further, that any upward pressure on interest rates could be a death knell for their survival. ****

    I can only comment on the foreseeable future. It's my understanding that the FED could start raising rates as early as late 2013 (Based upon a recent interview that I watched). Based upon the fact that RAD does currently have some variable rate debt, I expect that an increase in rates could have some impact on RAD, but nothing material.

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