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Big companies have long boasted about sustainability and ethics. But with the Business Roundtable changing its mind about the purpose of the corporation, there’s bound to be disagreement about which do-goodism is good.
In recent years, Rite Aid (NYSE:RAD) stock has done little more than fight to survive. The Camp Hill, Pennsylvania-based pharmacy chain has long struggled against its peers and has failed at multiple attempts to sell itself to a competitor. This resulted in shareholders approving a 1-20 reverse stock split in April to avoid delisting. However, this did little to stem the tide.Source: Shutterstock The company temporarily boosted optimism when it joined the Amazon (NASDAQ:AMZN) delivery network. However, excitement over the deal quickly faded. Plus, a change in the CEO position has failed to stem the drop in the RAD stock price. Without a deeper partnership with Amazon, I see little reason to buy Rite Aid stock. Amazon Deal Brought Only Temporary ReliefThe Amazon deal initially sparked hope as it would increase foot traffic into Rite Aid stores. There's some logic to this argument. As our own Will Ashworth argues, the Amazon return program at Kohl's (NYSE:KSS) led to a 9% rise in foot traffic and an 8% revenue increase in stores which supported the return program. But will that be enough?InvestorPlace - Stock Market News, Stock Advice & Trading TipsI think some also hope this will lead to an Amazon purchase of Rite Aid itself. Such optimism has brought disappointment before. An attempt by Walgreens Boots Alliance (NASDAQ:WBA) to take over the company led instead to the sale of 1,932 Rite Aid stores to the pharmacy chain. Albertsons also tried to buy Rite Aid. This proposed union also fell through after RAD shareholders balked. * 10 Marijuana Stocks That Could See 100% Gains, If Not More Moreover, the Amazon deal failed to cure the ills of Rite Aid stock. Within a month, RAD stock had fallen to levels it saw before the Amazon announcement. Also, the recent ascendancy of Heyward Donigan to the CEO position has not stemmed the decline. Rite Aid Can No Longer CompeteAs a result, the RAD stock price now stands at about $5.60 per share. Certainly, Amazon and online sales have changed the dynamics of the pharmacy business for Rite Aid and its peers. Standalone pharmacies have long dealt with competition from both grocers and major retailers.Now with the threat of online competitors, margins feel more pressure than ever. This probably explains some of the reasons why CVS (NYSE:CVS) entered the insurance business and built in-house clinics.Rite Aid cannot follow suit. Just as the company needs to make significant changes to survive, RAD finds itself with both falling revenue and profits. Unfortunately, as a $300 million company with $6.4 billion in long-term debt, it has no financial room for such a pivot.Put simply, RAD stock has become the Sears Holdings (OTCMKTS:SHLDQ) or the JCPenney (NYSE:JCP) of pharmacies. Rite Aid has evolved into the type of business that consumers do not need in today's world.The fact that its typical customer is over 55 and earns under $40,000 per year does not bode well for its future. Moreover, competition forces it to sell what it does offer at thin margins. Unless and until Amazon or another major online retailer can make Rite Aid relevant, I see a dim future for RAD stock. The Bottom Line on RAD StockOnly a deeper partnership with Amazon can save Rite Aid. The changing retail pharmacy landscape has fundamentally changed Rite Aid's business. Unlike Walgreens and CVS, it lacks the necessary resources to improve its business and remain relevant. Debts remain too high, and numerous suitors have passed on what remains of Rite Aid.If results at Kohl's serve as an indication, Rite Aid stores will see more foot traffic and revenue. However, this does not change the fact that consumers can find anything Rite Aid offers elsewhere and probably at a lower price.If Amazon took over the stores entirely, perhaps the company could still play a significant role in today's pharmacy business. Barring that scenario, the time has come to think of Rite Aid stock as the next Sears.As of this writing, Will Healy did not hold a position in any of the aforementioned stocks. You can follow Will on Twitter at @HealyWriting. More From InvestorPlace * 2 Toxic Pot Stocks You Should Avoid * 10 Marijuana Stocks That Could See 100% Gains, If Not More * 11 Stocks Under $10 to Buy Now * 6 China Stocks to Buy on the Dip The post Rite Aid Stock Continues to Fade into Irrelevance Despite Amazon appeared first on InvestorPlace.
Boston Mayor Martin Walsh says he's open to the idea of retail clinics operating in Boston. His response is a stark difference from the stance of the late Mayor Thomas Menino, who opposed retail clinics when they were first proposed in the city in 2007.
Levi & Korsinsky, LLP announces that class action lawsuits have commenced on behalf of shareholders of the following publicly-traded companies. Shareholders interested in serving as lead plaintiff have until the deadlines listed to petition the court and further details about the cases can be found at the links provided.
WOONSOCKET, R.I. , Aug. 22, 2019 /PRNewswire/ -- CVS Health Corporation ("CVS Health", NYSE: CVS) announced today the early results of the previously announced cash tender offers (the "Maximum ...
NEW ORLEANS, Aug. 21, 2019 -- ClaimsFiler, a FREE shareholder information service, reminds investors of pending deadlines in the following securities class action lawsuits:.
Teeth-straightening startup SmileDirectClub Inc. has filed to go public. The Nashville-based company is looking to raise $100 million in its public offering, according to an S-1 the company filed last week. The company has applied to list on Nasdaq under the ticker symbol “SDC,” and J.P. Morgan and Citigroup are the lead underwriters on the deal. SmileDirectClub ships clear aligners directly to customers, whose progress is monitored remotely by licensed dentists or orthodontists.
(Bloomberg Opinion) -- By all accounts, it was supposed to be a sleepy August for the U.S. corporate bond market. Three weeks ago, the thinking went something like this: Sure, the Federal Reserve would cut its benchmark lending rate on July 31, in what Chair Jerome Powell would call a “mid-cycle adjustment.” But Treasuries were already pricing in such a move on the short end. Further out on the curve, the 30-year yield was about 2.6%, still more than 50 basis points away from its all-time low. Ten-year yields were about 2%, which seemed like a comfortable range for both buyers and sellers. For company finance officers, it had the makings of a sellers’ market but one that would be around once summer drew to a close.Then things got crazy. The 30-year yield lurched lower by 8 basis points on Aug. 1, then 13 basis points on Aug. 5, then another 13 basis points on Aug. 12. After a one-day reprieve near its all-time low of 2.0882%, it cruised through that level, tumbling to as low as 1.914%. The rally was so intense that the U.S. Treasury Department made an unusual, unscheduled announcement that it was again exploring issuing 50- or 100-year bonds. Companies clearly felt they couldn’t afford to pass up this opportunity. In the first full week of August, CVS Health Corp., Humana Inc. and Welltower Inc. headlined $35 billion of debt sales among investment-grade firms, easily surpassing estimates. Then in the week through Aug. 16, more than $22 billion went through, including a rarely seen offering from Exxon Mobil to the tune of $7 billion. Market watchers expected that would just about wrap things up until after Labor Day on Sept. 2.Some finance officers had other ideas. 3M Co. borrowed $3.25 billion on Monday to help finance its acquisition of medical-products maker Acelity Inc. In total, issuers sold $6.65 billion of investment-grade debt on Aug. 19, already topping some predictions for $5 billion this week. Then on Tuesday, Bank of New York Mellon Corp. priced $1 billion at the lower end of its expected yield range, along with a handful of other borrowers with multimillion-dollar deals.All this is to say, companies are simple: They see staggering low yields, and they issue bonds. Investors, for their part, can’t get enough of them. The Bloomberg Barclays U.S. Corporate Bond Index has returned 13.3% so far in 2019. Over the past 12 months, the index is up 12.5%, compared with just 1.5% for the S&P 500 Index. The average spread on corporate bonds has widened to 122 basis points, from 107 basis points at the end of July, but that’s just because they couldn’t keep up with the relentless rally in Treasuries, not because of a lack of buyers. If Bank of America Corp. strategists led by Hans Mikkelsen are correct, the demand in credit markets has lasting power. They say the $16 trillion of negative-yielding debt globally has left investors — and particularly those outside the U.S. — with few alternatives besides purchasing companies’ debt. “There is a wall of new money being forced into the global corporate bond market,” they wrote on Aug. 16. “Given the near extinction of non-USD IG yield, foreign investors are forced to take more risk.”Of course, buying investment-grade bonds hardly qualifies as a speculative endeavor. Exxon Mobil, in fact, has the same credit rating as the U.S. government from both Moody’s Investors Service and S&P Global Ratings. On the other hand, Bloomberg News’s Jeannine Amodeo and Davide Scigliuzzo reported this week that three leveraged-loan sales that had been languishing in the U.S. market for weeks were pulled as investors sought higher-quality assets. Vewd Software became the fourth on Tuesday, scrapping a $125 million term loan due to market conditions. Leveraged loans, it should be noted, are floating-rate securities and so face weaker demand when the Fed appears poised to cut rates, as it does now. But for large, highly rated companies, their behavior in recent weeks is exactly what should be expected. Exxon Mobil issued 30-year bonds to yield 3.095%. In November, five-year Treasuries offered the same amount. 3M, rated a few steps below triple-A, priced 30-year debt to yield 3.37%, less than the going rate on long Treasury bonds just nine months ago. No matter how you slice it, they’re getting borrowing costs that seemed unthinkable around this time last year.Interestingly, these low yields should be encouraging governments to borrow more, too. I wrote last week that the bond markets were begging for infrastructure spending. However, it seems neither Germany nor the U.S. has any appetite for that sort of initiative. The German government is reportedly preparing fiscal stimulus that could be triggered by a deep recession, while President Donald Trump hasn’t ruled out a payroll tax cut to stave off any economic weakness.It’s certainly possible that U.S. yields will only fall further from here, and other companies can also borrow or refinance at rock-bottom interest rates. But the move in global bond markets in recent weeks could was extreme, to say the least. The weak demand for Germany’s 30-year bond auction on Wednesday, which offered a coupon of 0% at a yield of -0.11%, suggests there are at least some lines that investors won’t cross.For prudent companies, it was well worth delaying summer vacations to get their deals done.To contact the author of this story: Brian Chappatta at email@example.comTo contact the editor responsible for this story: Daniel Niemi at firstname.lastname@example.orgThis column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.Brian Chappatta is a Bloomberg Opinion columnist covering debt markets. He previously covered bonds for Bloomberg News. He is also a CFA charterholder.For more articles like this, please visit us at bloomberg.com/opinion©2019 Bloomberg L.P.
WOONSOCKET, R.I. , Aug. 21, 2019 /PRNewswire/ -- CVS Health Corporation ("CVS Health", NYSE: CVS) announced today the applicable Reference Yields and Total Consideration (each as summarized in ...
Retail clinics at drugstores, a low-cost option for a range of ailments, have proliferated across Massachusetts. But not in Boston.
One of my favorite things to do in the market is buy the dip in beaten up and undervalued stocks, but, only when doing so makes sense. When it comes, the reality is that buying the dip in Rite Aid (NYSE:RAD) simply doesn't make sense right now. Rite Aid has a long way to go.Source: Shutterstock The fundamentals are broken. The chart is broken. Investor sentiment is dour. There has been C-suite turnover. And, above all else, the outlook for a turnaround remains as bleak today, as it's ever been.As such, the most likely path forward for Rite Aid is lower revenues, lower profits, lower margins, and a lower stock price.InvestorPlace - Stock Market News, Stock Advice & Trading TipsTo be sure, there is a pathway here through a unique Amazon (NASDAQ:AMZN) partnership wherein RAD stock turns into a multi-bagger from current levels. But, that pathway lacks visibility and tangibility here and now. Until that pathway gains visibility and tangibility, Rite Aid stock isn't worth the risk. * 10 Cheap Dividend Stocks to Load Up On As such, the investment implication with RAD stock is crystal clear. First, sell now and stay away for the foreseeable future. Second, monitor the company and see if the Amazon catalyst does boost the numbers next quarter. Third, if it does, buy into the rebound. If it doesn't, continue to stay away until it does (if ever). Stay Away From Rite Aid Stock For NowThe big picture reality here is that Rite Aid is a broken company with very dour go-forward growth prospects.At one point in time, Rite Aid was a large pharmacy plus convenience store with a wide reach and busy stores. That was before the ecommerce era. Now, consumers can basically get everything they got at a Rite Aid 20 years ago, from Amazon, Walmart (NYSE:WMT), or CVS (NYSE:CVS) today, without ever having to leave their homes and probably at lower prices, too.Even further, because Rite Aid has struggled significantly over the past several years, the company has been left consistently cash-strapped. That means the company hasn't put as much money back into its stores or operations as peers.The result? Two-fold. One, Rite Aid's stores often look outdated next to Walmart or Target (NYSE:TGT) stores, which now have self check-out kiosks. Two, Rite Aid's e-commerce business isn't as built out as peer e-commerce businesses.As such, Rite Aid is the laggard in the pharmacy retail world today. Given its lack of resources, Rite Aid stock projects as the laggard for the foreseeable future, too. That means revenues will keep dropping. Margins will suffer from that loss of revenue scale. Profits will consequently drop more.As go profits, so go stocks. Thus, so long as this profit erosion trend remains in place, RAD stock will likely continue to slide lower. The Amazon Catalyst and Rite Aid StockThe bull thesis on RAD stock centers around a recent partnership with Amazon sparking a reversal in the current profit erosion trend at Rite Aid.This could happen. Rite Aid recently became a "fulfillment center" of sorts in Amazon's rapidly expanding distribution. That means Amazon customers can now pick up their Amazon.com orders in Rite Aid stores, which further means that Amazon customers will start going into Rite Aid stores.That's big, mostly because Amazon.com shoppers don't typically go into Rite Aid stores. Rite Aid's core shopper base is 55 & up and makes less than $40,000 a year. Amazon.com shoppers, on the other hand, skew young and rich aka, not Rite Aid shoppers.Most of these Amazon.com shoppers will likely walk into a Rite Aid store, say why would I ever shop here, pick-up their Amazon.com orders, and promptly leave. But, some of them could stick. That is, some will walk in, see something they like in the Rite Aid store (maybe Thrifty ice cream) and start shopping at Ride Aid with greater frequency.That's a long-running tailwind. Those Amazon.com shoppers are young, and their purchasing power is only going up. Thus, if some of those shoppers start shopping at Rite Aid in greater frequency, Rite Aid's revenues, margins, and profits will set out on a secular, multi-year uptrend.If that happens, RAD stock could be a multi-bagger from current levels, but, that's a big "if." As such, investors are best to wait for confirmation that this is happening, before taking a bet on a stock that has been a falling knife for several years. Bottom Line on Rite Aid StockI don't think all hope is lost for Rite Aid stock. Instead, I do think that the Amazon partnership could spark a huge fundamental trend reversal which ultimately causes RAD stock to double or triple from current levels.But, I also peg the likelihood of that reversal materializing at "very low." As such, the best thing to do here is to sell RAD stock and stay away until the numbers confirm that the Amazon partnership is providing a meaningful boost to Rite Aid's numbers.As of this writing, Luke Lango was long AMZN, WMT, CVS, and TGT. More From InvestorPlace * 2 Toxic Pot Stocks You Should Avoid * 10 Cheap Dividend Stocks to Load Up On * The 10 Biggest Losers from Q2 Earnings * 5 Dependable Dividend Stocks to Buy The post Don't Count on Amazon to Save Rite Aid Stock Just Yet appeared first on InvestorPlace.
NEW ORLEANS, Aug. 19, 2019 -- Kahn Swick & Foti, LLC (“KSF”) and KSF partner, former Attorney General of Louisiana, Charles C. Foti, Jr., remind investors of pending.
The stock market has rushed to all-time highs in 2019 and -- despite recent trade-inspired turbulence -- is still on pace to have one of its best years in recent memory. But not all stocks have joined in on the rally. Instead, a handful of stocks have actually had a rough 2019, dropping big year-to-date into historically undervalued territory -- even while the market trades at a decade-high valuation.Some of these undervalued stocks are undervalued for a reason, and should be avoided for the foreseeable future. The fundamentals simply don't warrant a turnaround.But some of these undervalued stocks look primed for a breakout. That is, some of them appear unreasonably undervalued, with big catalysts on the horizon -- a combination which paves a tangible pathway for big upside.InvestorPlace - Stock Market News, Stock Advice & Trading Tips * 7 Great Small-Cap Stocks to Buy With that in mind, let's take a look at 10 undervalued stocks with breakout potential in the back-half of 2019. Foot Locker (FL)Source: Shutterstock The Valuation: Because the athletic apparel sector sources a lot of production from China, many athletic apparel stocks find themselves at the epicenter of the U.S.-China trade war. Foot Locker (NYSE:FL) is no exception. The company's margins have come under significant pressure thanks to tariffs, and in response, investors have sold off FL stock to an anemic 8-times forward earnings multiple, versus a five-year-average forward multiple north of 12, a consumer discretionary sector average multiple north of 20, and a footwear sector average multiple north of 28.The Breakout Catalyst: Foot Locker's demand trends are healthy. Last quarter, Foot Locker reported nearly 5% comparable sales growth. Thus, the whole problem here is the trade war. If the trade war cools, FL stock will presumably rally in a big way. It increasingly appears that this will happen. U.S. President Donald Trump has delayed the next round of tariffs, while China is coming under intense internal pressure with the Hong Kong riots. Consequently, it appears both sides want to de-escalate trade tensions. Such a de-escalation should couple with strong demand drivers at Foot Locker to propel a breakout rally in FL stock into the end of 2019. CVS (CVS)Source: Shutterstock The Valuation: Pharmacy giant CVS (NYSE:CVS) is in the midst of multi-year downtrend thanks to adverse consumption and legislation trends, the sum of which have weighed on revenues, profits, and investor sentiment. Net net, CVS stock today trades at a depressed 8.5-times forward earnings multiple, versus a five-year-average forward multiple of over 13. * 3 Warning Signals a Stock Market Crash Is Coming The Breakout Catalyst: Both consumption and legislation trends are finally progressing in the right direction for CVS. On the consumption side, CVS reported a robust 4.2% increase in same store sales last quarter, including an impressive 2.9% increase in front store sales. This is mostly because, thanks to the Aetna acquisition, CVS is pushing forward on a promising local healthcare plan. Meanwhile, on the legislation side, the White House scrapped a PBM rebate program which would've been disastrous for CVS. Broadly, then, it increasingly appears that CVS stock is the early innings of massive multi-quarter rebound. AT&T (T)Source: Shutterstock The Valuation: Telecom-giant AT&T (NYSE:T) has featured a persistently cheap stock for the past several years. T stock trades at just 10-times forward earnings today and has averaged an 11-times forward earnings multiple over the past five years. In other words, T stock has been stubbornly cheap forever.The Breakout Catalyst: AT&T stock has been stubbornly cheap forever because the company has been staring at huge cord-cutting headwinds. Much like Disney (NYSE:DIS) has done over the past few months, though, AT&T is prepared to shake off those cord-cutting headwinds over the next few months thanks to the launch of a new content-packed streaming service in HBO Max. At the same time, the forthcoming 5G wave promises to provide a big boost to the company's wireless business. Thus, over the next twelve months, two big catalysts -- a full blown pivot into the streaming space and the mainstream roll-out of 5G -- will finally "wake up" T stock and spark a big breakout rally in this stubbornly cheap stock. American Airlines (AAL)Source: Shutterstock The Valuation: Airline stocks have been hit hard over the past twenty months, dragged down by rising oil prices in early 2018, slowing global air travel demand in late 2018 and the 737 MAX crisis in 2019. American Airlines (NYSE:AAL) has been no exception to the trend. If anything, it's been an out-sized loser, with AAL stock down more than 50% since early 2018. At present, given the the airline industry's sizable headwinds, AAL stock trades at just 5.5-times forward earnings, versus an airline average forward earnings multiple north of 8. * 15 Growth Stocks to Buy for the Long Haul The Breakout Catalyst: The fundamentals underlying the airline industry are positioned to meaningfully improve over the next few quarters. Oil prices will drop, as supply continues to outstrip demand in a slowing global manufacturing economy. Air travel demand will remain robust, as the global consumer economy remains on solid footing. 737 MAX planes will get back into the air by early 2020. Net net, by early 2020, top and bottom line trends across the whole airline industry should meaningfully improve, and that improvement should lead to a breakout recovery rally in depressed and beaten-up AAL stock. AMC Entertainment (AMC)Source: Shutterstock The Valuation: It's been a rough year for movie theater operator AMC Entertainment (NYSE:AMC), as sluggish box office trends in the first half of 2019 have breathed life back into the thesis that movie theaters are going extinct. As that thesis has gained traction, AMC stock has plunged to dirt cheap levels. Today, AMC stock trades at less than 0.3-times trailing sales. Three years ago, the trailing sales multiple was above 1.The Breakout Catalyst: July 2019 box office trends showed meaningful improvement from the January through June trend. August is off to a good start, too. The outlook for the rest of 2019 is also favorable, headlined by a second Frozen movie and the final installment in the latest Star Wars trilogy. As box office trends continue to improve into the end of the year, the "movie theaters are dying" thesis will start lose steam. As that thesis drowns out, investor sentiment will improve, and the stock will meaningfully recover. Ford (F)Source: Shutterstock The Valuation: After several years of red hot growth, the global auto market is cooling off. In that cooling market, U.S. auto giant Ford (NYSE:F) is losing share. The company's margins are also coming under intense pressure thanks to U.S.-China tariffs. Net net, revenue, margin and profit trends at Ford have been depressed for some time. This has led to an equally depressed Ford stock, which presently trades at just 7.2-times forward earnings. * 10 Cheap Dividend Stocks to Load Up On The Breakout Catalyst: The recent surge of proactive fiscal stimulus in the U.S. economy in the first half of 2019, should have a positive impact on auto market demand in the back half of 2019. Continued healthy labor conditions should similarly help reinvigorate auto demand. At the same time, Ford is aggressively reshaping its car portfolio to be more electric and thereby, more relevant. Tariffs are also being pushed back, and the trade war looks like it will cool down from here. Putting all that together, then, Ford's underlying fundamentals are positioned to improve significantly over the next few quarters. As they do, Ford stock should bounce back from today's depressed levels. Intel (INTC)Source: JHVEPhoto / Shutterstock.com The Valuation: When it comes to playing the next-gen AI and data revolution, chipmaker Intel (NASDAQ:INTC) offers investors arguably the cheapest way to do it. The company has exposure to all of those secular growth end markets (self driving, machine learning, hyper-scale data centers, so on and so forth). Yet, INTC stock trades at just 11-times forward earnings, mostly because Intel is a slow growth player in those market that is rapidly losing share to faster growing rivals.The Breakout Catalyst: INTC stock could charge higher for three big reasons. First, Intel's next-gen chips are finally here (and more are coming soon), so the company may finally be able to win share back from Advanced Micro Devices (NASDAQ:AMD). Second, the trade war appears to be cooling, and that's big for both Intel's demand and margins. Third, there are rumors out there that hyper-scale data center spend - which has taken step back thus far in 2019 - is finally starting to ramp back up. Those three catalysts together could push INTC up towards $60 within the next few quarters. IBM (IBM)Source: Shutterstock The Valuation: Much like shares of AT&T, shares of blue chip tech giant IBM (NYSE:IBM) have been stubbornly cheap for the past several years as the company has dealt with sluggish revenue, margin, and profit growth trends. Investors keep waiting for things to turn around. They never do. As such, IBM stock has been depressed for a long time. * 7 Safe Dividend Stocks for Investors to Buy Right Now The Breakout Catalyst: IBM's sluggish growth trends could finally turn around over the next few quarters, thanks to the integration of Red Hat. Last year, IBM announced its intention to acquire hybrid cloud company Red Hat. That acquisition just closed. Importantly, Red Hat is growing revenues at a much faster rate than IBM, and operates at higher gross margins. Red Hat also opens up IBM's cloud business to Red Hat's long list of hybrid cloud customers. Thus, the integration of Red Hat into IBM's business will provide a meaningful lift to IBM's revenue and profit growth trends. That lift should breathe life back into depressed IBM stock. Skechers (SKX)The Valuation: As mentioned earlier, the athletic apparel sector finds its square in the middle of the U.S.-China trade war. Athletic footwear brand Skechers (NYSE:SKX) is no exception. Consequently, as trade tensions have heated up in August, SKX stock has retreated. The stock now trades at less than 15-times forward earnings, versus an apparel retail sector average multiple of nearly 18 and footwear sector average multiple of nearly 30.The Breakout Catalyst: Prior to trade tensions heating up, Skechers reported blowout second quarter numbers which comprised big revenue growth, big margin expansion, and big profit growth. SKX stock soared in response to that print. The stock has since given up nearly all of those gains because of Trump's proposed new tariffs. But, those new tariffs are being edited and delayed -- and may never actually come into existence. As such, as fear surrounding those new tariffs eases and disappears over the next few months, SKX stock should bounce back to its post-earnings highs. Kohl's (KSS)Source: Sundry Photography/Shutterstock.com The Valuation: The physical retail sector has been killed over the past several quarters, mostly because a disappointing holiday 2018 season has flowed into continued sluggish sales trends through the first half of 2019. Kohl's (NYSE:KSS) -- one of the largest physical retailers in the U.S. -- has not been immune to the sell-off. In 2019, Kohl's comparable sales have dropped into negative territory, while margins have retreated. In response, KSS stock has dropped big, and now trades at a dirt cheap 9.6-times forward earnings multiple (versus a five-year-average forward earnings multiple of 12-plus). * 7 Great Small-Cap Stocks to Buy The Breakout Catalyst: The macro retail backdrop will meaningfully improve over the next few quarters, thanks to: 1) proactive fiscal stimulus in the first half of 2019, 2) continued favorable U.S. labor conditions, 3) plunging interest rates and 4) de-escalating trade tensions. Against that improving retail backdrop, Kohl's growth trends should bounce back because this company has a unique value prop (off price and off mall) and winning omni-channel growth strategy based on multiple Amazon (NASDAQ:AMZN) partnerships. As such, by the end of 2019, Kohl's comps should inflect back into positive territory, while margins should march higher. If so, KSS stock should bounce back in a big way from today's depressed valuation levels.As of this writing, Luke Lango was long FL, CVS, T, DIS, AMC, F, INTC, and AMZN. More From InvestorPlace * 2 Toxic Pot Stocks You Should Avoid * 10 Cheap Dividend Stocks to Load Up On * The 10 Biggest Losers from Q2 Earnings * 5 Dependable Dividend Stocks to Buy The post 10 Undervalued Stocks With Breakout Potential appeared first on InvestorPlace.
News that struggling drugstore chain Rite Aid (NYSE:RAD) has selected a new CEO wasn't the change shareholders were hoping for, if the recent RAD stock price plunge is any indication. Shares have fallen more than 20% since the 12th of August, when the company announced Heyward Donigan would be replacing John Standley as CEO, effective immediately.Source: Shutterstock Of course, poor performance may have been in the cards anyway. Rite Aid stock has been losing ground since the beginning of 2017, when Walgreens Boots Alliance (NASDAQ:WBA) first started to waffle on its plans to acquire the struggling company. By early 2018, the deal was pared back to only 1932 stores, and a price tag of only $3.6 billion.It's not enough cash for the company, now only 2500 stores strong, to buy its way out of the trouble it found itself in a few years back. Thank the competition from bigger CVS Health (NYSE:CVS) as well as Walgreens for that.InvestorPlace - Stock Market News, Stock Advice & Trading Tips * 10 Stocks Under $5 to Buy for Fall New leadership sometimes breathes new life into an old company though. In that light, Donigan's placement may well mark a turning point for Rite Aid, and by extension, for RAD stock.On the other hand, the crux of Rite Aid's woes aren't particularly elusive. The company lacks the scale Walgreens and CVS Health now enjoy, further exacerbating the fact that the drugstore chain has to spend too much for too little. Rite Aid Needs to Think BiggerIt's not from a lack of trying that Rite Aid has been unable to dig its way out of trouble. If nothing else, it has willingly been creative.Case in point: In June, it allowed Amazon (NASDAQ:AMZN) to establish parcel pickup lockers in 100 stores, with plans to offer online shopping deliveries at 1500 stores by the end of the year. That added foot traffic might lead more consumers into Rite Aid stores, where they just might make a separate purchase. The company is also testing telehealth options.The growth prospects of such initiatives are modest. Amazon's package pickup program may only draw a handful of additional consumers into any given store on any given day. Meanwhile, CVS plans to open actual medical clinics within 1500 of its 6200 stores by 2021 … an arguably better option than a virtual doctor's visit.Ergo, Rite Aid's biggest problem -- the aforementioned lack of scale -- remains a big problem. That is, it's not selling enough goods at the right price to adequately pay its bills. Selling stores to rival Walgreens rather than fixing those locales may have ultimately worsened the problem.Quantitative information affirms the qualitative idea. RAD Stock by the NumbersIt's curious. On a gross margin basis, Rite Aid outperforms or at least mirrors its rival pharmacy chains. In other words, the difference between its cost of merchandise and its retail price of that merchandise sold is as it should be.Where Rite Aid falls oddly short is in span between the income statement's gross profit figure and its EBITDA (earnings before interest, taxed and depreciation) figure. The pharmacy chain is only converting about half the revenue into earnings that its chief rivals are. The company's EBITDA rate, as a percentage of sales, are consistently less than half.There's only one key line between those two numbers on an income statement, by the way … selling and general/administrative expenses. Rite Aid's are considerably more than CVS Health's, and notably higher than Walgreens'. While the differences may look and feel modest for other types of industries, in the retailing arena where margins tend to be thin, the differentials are significant.Donigan's first task may be simply to figure out where that SG&A money is going.Some cost-cutting on that front may be able to restore an ever-shrinking cash flow that has limited the company's capacity to invest in its own growth. In fact, after years of steady declines, the company's operating cash flow has turned negative as of 2019. Bottom Line for RAD StockEasier said than done, to be fair. Some expenses are static and don't scale. Advertising expenses, for instance, cost from one organization to another regardless of how many stores are benefitting from those ads.Also bear in mind that Rite Aid operates a pharmacy benefits management outfit, and CVS is now teamed up with health insurer Aetna. The margin profiles described above aren't perfect apples-to-apples comparisons.These companies are akin enough to take note of the surprisingly wide scope of EBITDA margin and administration spending disparities. They're more alike than different and the numbers should be closer together.Only time will tell if patient owners of RAD stock will eventually be rewarded for that patience, just as only time will tell if Heyward Donigan will accept the fact that her company is smaller than its rivals, and must adjust accordingly where she can.There's little doubt, however, as to where and how Rite Aid is missing an opportunity. And the RAD stock price rebound may struggle to last until costs are curbed, even if culling those costs makes things tough.As of the time of this writing, James Brumley did not hold a position in any of the aforementioned securities. To learn more about James, visit his site at jamesbrumley.com, or follow him on twitter at @jbrumley. More From InvestorPlace * 2 Toxic Pot Stocks You Should Avoid * 10 Cheap Dividend Stocks to Load Up On * The 10 Biggest Losers from Q2 Earnings * 5 Dependable Dividend Stocks to Buy The post New Rite Aid CEO Needs More Than Amazon Partnership to Drive RAD Stock Higher appeared first on InvestorPlace.
WOONSOCKET, R.I., Aug. 19, 2019 /PRNewswire/ -- CVS Health Corporation ("CVS Health", NYSE: CVS) announced today the final results of the previously announced cash tender offers (the "Any and All Tender Offers" and each an "Any and All Tender Offer") for (1) any and all of its 3.125% Senior Notes due 2020 (the "2020 Any and All Notes") and (2) any and all of its 4.125% Senior Notes due 2021, the 4.125% Senior Notes due 2021 issued by its wholly-owned subsidiary, Aetna Inc. ("Aetna") and the 5.450% Senior Notes due 2021 issued by Coventry Health Care, Inc., a wholly-owned subsidiary of Aetna (collectively, the "2021 Any and All Notes" and together with the 2020 Any and All Notes, the "Any and All Notes"). The Any and All Tender Offers expired at 5:00 p.m., New York City time, on August 14, 2019 (the "Any and All Expiration Date").
NEW YORK, NY / ACCESSWIRE / August 18, 2019 / The Klein Law Firm announces that class action complaints have been filed on behalf of shareholders of the following companies. If you suffered a loss, you have until the lead plaintiff deadline to request that the court appoint you as lead plaintiff.
Kahn Swick & Foti, LLC and KSF partner, former Attorney General of Louisiana, Charles C. Foti, Jr., remind investors that they have until October 14, 2019 to file lead plaintiff applications in a securities class action lawsuit against CVS Health Corporation , if they formerly held shares of Aetna Inc.
Levi & Korsinsky, LLP announces that class action lawsuits have commenced on behalf of shareholders of the following publicly-traded companies. Shareholders interested in serving as lead plaintiff have until the deadlines listed to petition the court and further details about the cases can be found at the links provided.
Robbins Geller Rudman & Dowd LLP (http://www.rgrdlaw.com/cases/cvshealth/) today announced that a class action has been commenced by an institutional investor on behalf of all former Aetna Inc. shareholders who acquired CVS Health Corporation (CVS) shares in exchange for their Aetna shares in connection with CVS’s acquisition of Aetna on November 28, 2018. The Private Securities Litigation Reform Act of 1995 permits any former Aetna shareholders who acquired CVS shares in exchange for their Aetna shares in connection with CVS’s acquisition of Aetna to seek appointment as lead plaintiff.
Announcement of Periodic Review: Moody's announces completion of a periodic review of ratings of Aetna Inc. New York, August 15, 2019 -- Moody's Investors Service ("Moody's") has completed a periodic review of the ratings of Aetna Inc. and other ratings that are associated with the same analytical unit. The review was conducted through a portfolio review in which Moody's reassessed the appropriateness of the ratings in the context of the relevant principal methodology(ies), recent developments, and a comparison of the financial and operating profile to similarly rated peers.
PLANTATION, Fla. , Aug. 15, 2019 /PRNewswire/ -- Aetna Better Health of Florida , a CVS Health company (NYSE: CVS), has been awarded a new, statewide contract by the Florida Healthy Kids Corporation, a ...
WOONSOCKET, R.I., Aug. 15, 2019 /PRNewswire/ -- CVS Health Corporation ("CVS Health", NYSE: CVS) announced today the results of the previously announced cash tender offers (the "Any and All Tender Offers" and each an "Any and All Tender Offer") for (1) any and all of its 3.125% Senior Notes due 2020 (the "2020 Any and All Notes") and (2) any and all of its 4.125% Senior Notes due 2021, the 4.125% Senior Notes due 2021 issued by its wholly-owned subsidiary, Aetna Inc. ("Aetna") and the 5.450% Senior Notes due 2021 issued by Coventry Health Care, Inc., a wholly-owned subsidiary of Aetna (collectively, the "2021 Any and All Notes" and together with the 2020 Any and All Notes, the "Any and All Notes").
Among marijuana stocks, very few have achieved profitability. But sooner or later, every company needs to reach that milestone.That sounds obvious, like "Business 101." In fact, it's one of the most basic requirements for a stock to trade on the "Big Board," the New York Stock Exchange (NYSE)… and also for the Nasdaq, for that matter.And yet, in the cannabis industry, Charlotte's Web (OTCMKTS:CWBHF) is one of the few that can deliver positive earnings! That's just one reason I want to put it on your radar today.InvestorPlace - Stock Market News, Stock Advice & Trading TipsCharlotte's Web was one of the original hemp-cannabidiol (CBD) companies, and perhaps the biggest success story of Colorado's legal cannabis boom. * 10 Stocks Under $5 to Buy for Fall CWBHF is also my pick for InvestorPlace's Best Stocks for 2019 contest - but really, it's among the top marijuana stocks for the next three years, at least, and here's why:With news Wednesday that the company's Q2 revenue rang in at $25 million, Charlotte's Web is expecting to post sales of $120-$170 million for the year. (At the midpoint, that puts the stock at a very attractive price-to-sales ratio of just 6X). But next year, analysts are expecting sales of $348 million… and $444 million the year after that.If that sounds lofty, keep in mind that Charlotte's Web CBD will soon be in twice as many stores as it was last year. From a niche product that was mainly found in health stores, you can now buy it at "big box" stores like CVS Health (NYSE:CVS) and, now, Kroger (NYSE:KR).The deal with Kroger, announced on July 31, is big; it adds 1,350 stores (in 22 states) to Charlotte's Web's retail network. The total number of retail locations carrying the company's products stood at 7,817 at the end of the quarter, up 1,926.Demand for hemp-CBD and this particular brand is booming, and to keep up, Charlotte's Web just expanded into the prestigious Colorado Technology Center, strategically located between the cities of Boulder and Denver.With the new location, Charlotte's Web will quadruple its footprint. After all, to make hemp-CBD, you've got to process a lot of hemp. And while operations will begin "early next year," the growth opportunity there will be just beginning.The Colorado Tech Center is better known for its tech startups, and Charlotte's Web is bringing some of that same energy to this expansion. Rather than resorting to CBD extraction techniques that are "decades old," their ambition is to use state-of-the-art technology to maintain what's always been the company's edge: "the highest-quality products."Here's another significant edge: reputation. The truth about the CBD market is that there are a lot of bad players - and those other guys will soon be removed by the coming wave of federal regulation. As I always say in Investment Opportunities, marijuana stocks are one group that needs regulators. And as a legitimate leader of the industry, Charlotte's Web will be the beneficiary.That's the context of the company's eye-catching earnings-per-share (EPS) projections. Already leading the pack with $0.27 per share expected this year, that should increase to $0.74 next year and $1.06 in 2021.The stock is up 65% since I picked it for the Best Stocks contest, even after it stumbled on Wednesday's quarterly report. But given these projections, CWBHF is still a steal as it trades around $20 on the over-the-counter (OTC) markets.As for the major stock exchanges - which open up a whole new world to companies like this - Charlotte's Web is on the right track to meet the NYSE and Nasdaq's earnings requirements for the long term. And I always believe in investing in a great stock early - BEFORE it makes that jump. Marijuana Stocks: Another "Jumper" Stock You Won't Want to MissGiven that it's fully legalized on its federal level, Canada is always a popular place to look for marijuana stocks, too. And one of my picks there just announced that it will "jump" to the Toronto Stock Exchange. (Charlotte's Web did, too, for that matter.)When a company moves to the big leagues, it opens up lots of doors for financing, offerings, and big institutional money. It's like the market's "seal of approval": an elite status with long-term benefits to the share price.In the next six to 12 months, I expect this particular Canadian stock to announce a second uplisting - to a U.S. exchange. That would be even more significant.Business wise, I'd put its extraction operation up against anyone's. At Investment Opportunities, you can get all the details on this and other up-and-coming cannabis stocks in the legalization mega-trend. Timing is EverythingEarly stage investing can be exciting… but also tricky.When a new industry booms - when billions of dollars are up for grabs - you can be sure all kinds of people will rush into the sector and try to get their share.Some of the companies will have smart, hardworking people running the show… great people to invest with. But, let me tell you, some of these folks aren't the kind of people you'd ever want to invite over for dinner… let alone do business with.That's a fact of life in any industry. But this challenge is magnified in a new industry with massive potential - like the legal marijuana industry.This is why it is critical to have a system… a framework for evaluating legal marijuana stocks.A path to profitability is certainly one of the things I look for here. But there's a little more to it than that!So, I created a 5-Factor Analytical Model for evaluating newly public legal marijuana companies to as part of my Cannabis Cash Calendar.I've put my model to the test in recent weeks to uncover my next Cannabis Cash Calendar recommendation… which I just released on Tuesday to my Investment Opportunities readers. But there is still time for you to get in on it, too, as it's still under my buy price!The opportunity in legal weed is much like the opportunity internet stocks offered in 1994… or that bitcoin offered in 2015. It is set to grow so much over the next 10 years that it will turn out to be one of the three biggest investment opportunities of your entire life - no matter when you were born.Click here to learn more and find out how you can get immediate access to my new recommendation.Matthew McCall is the founder and president of Penn Financial Group, an investment advisory firm, as well as the editor of Investment Opportunities and Early Stage Investor. He has dedicated his career to getting investors into the world's biggest, most revolutionary trends BEFORE anyone else. The power of being "first" gave Matt's readers the chance to bank +2,438% in Stamps.com (STMP), +1,523% in Ulta Beauty (ULTA), +1,044% in Tesla (TSLA), +611% in Liquefied Natural Gas Limited (LNGLY), +324% in Bitcoin Services (BTSC), just to name a few. If you're interested in making triple-digit gains from the world's biggest investment trends BEFORE anyone else, click here to learn more about Matt McCall and his investments strategy today. More From InvestorPlace * 2 Toxic Pot Stocks You Should Avoid * 10 Stocks Under $5 to Buy for Fall * 5 Stocks to Avoid Amid the Ongoing Trade War * 7 5G Stocks to Buy Now for the Future The post Marijuana Stocks: Catch the Next Hot Pot Stock Before It 'Jumps' appeared first on InvestorPlace.