Based on the aggregated intelligence of 180,000-plus investors participating in Motley Fool CAPS, the Fool's free investing community, retail drugstore operator Rite Aid (NYSE: RAD ) has received the dreaded one-star ranking.
With that in mind, let's take a closer look at Rite Aid's business and see what CAPS investors are saying about the stock right now.
Rite Aid facts
|Headquarters (Founded)||Camp Hill, Pa. (1927)|
|Market Cap||$1.4 billion|
|Trailing-12-Month Revenue||$25.4 billion|
|Management||CEO John Standley
CFO Frank Vitrano
|Return on Capital (Average, Past 3 Years)||3.2%|
|Cash/Debt||$148.5 million / $6.3 billion|
Sources: S&P Capital IQ and Motley Fool CAPS.
On CAPS, 48% of the 282 members who have rated Rite Aid believe the stock will underperform the S&P 500 going forward.
"Among other things, our indebtedness will:
• limit our flexibility in planning for, or reacting to, changes in the markets in which we compete;
• place us at a competitive disadvantage relative to our competitors with less indebtedness;
• render us more vulnerable to general adverse economic, regulatory and industry conditions; and
• require us to dedicate a substantial portion of our cash flow to service our debt."
Interest coverage = 0.2x
Quick ratio = 0.4x
Operating income hardly exceeds interest payments. How do you compete against [Walgreen] and CVS when you are barely scraping by after servicing debt?
If you want to retire rich, you need to put together the best portfolio you can. Luckily, we've found another stock we are incredibly excited about -- excited enough to dub it "The Motley Fool's Top Stock for 2012." We have compiled a special free report for investors to uncover this stock today. The report is 100% free, but it won't be here forever, so click here to access it now.
Want to see how well (or not so well) the stocks in this series are performing? Follow the new TrackPoisedTo CAPS account.