Rite Aid, Delta Air Lines Rally Higher on Revenue Growth

Dow recovers from new year’s hangover, though Wal-Mart isn’t so lucky

Jan 3, 2014 at 6:18PM

Although we don't believe in timing the market or panicking over daily movements, we do like to keep an eye on market changes -- just in case they're material to our investing thesis.

The Dow Jones Industrial Average (DJINDICES:^DJI) regained some of the ground it lost in yesterday's 135-point walloping Friday, ending slightly higher after a statement from outgoing Federal Reserve Chairman Ben Bernanke. Bernanke, whose term ends Jan. 31. He assured markets that the Fed remains committed to its quantitative easing program, which the central bank trimmed from $85 billion to $75 billion per month at its last policy meeting in December. Shrugging off data revealing slowing auto sales growth in December, the Dow stayed mostly optimistic, adding 28 points, or 0.2%, to end at 16,469. 

While the Dow finished on a positive note today, shares of blue chip retailer Wal-Mart Stores (NYSE:WMT) did not, losing 0.3% after news of a recall in China hit the wires. The drop in the stock price, though minuscule, might still be exaggerated; the company is recalling a specific brand of donkey meat it sold in just two Chinese locations after China's government revealed DNA tests of the product contained fox meat, as well. This should blow over pretty quickly due to the contained nature of the incident; the only obvious risk the recall poses is to Wal-Mart's PR department, which should probably start proactively combatting migraines. 

Like Wal-Mart, Rite Aid (NYSE:RAD) stores feature both a retail and a pharmacy side, though it's fair to say that Rite Aid's a bit more dependent on its pharmacy for success. The drugstore revealed same-store sales numbers for December, a metric that sent Rite Aid stock surging 8.5%, as shares continue a remarkable rally that's nearly quadrupled the investment of a shareholder buying in just a year ago. Pharmacy results continue to send the stock skyward, as revenue growth from prescriptions continues trending boldly higher.

Another stock that's done quite well for anyone who bought in a year ago, Delta Air Lines (NYSE:DAL), also soared on Friday. Shares of the Atlanta-based airline, which have more than doubled in the last year, rallied 5.5% today. Delta Air Lines stock was also boosted by newly released December sales figures, which came in far stronger than expected. Not only did per-seat revenue log 10% year-over-year gains, but fuel costs were $0.03/gallon lower than the company expected. You don't have to be a financial savant to see that higher revenue and lower costs mean higher profits -- profits that Delta shareholders are entitled to a piece of.

The death of Wal-Mart: The real cash kings changing the face of retail
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Fool contributor John Divine has no position in any stocks mentioned. You can follow him on Twitter @divinebizkid and on Motley Fool CAPS @TMFDivine.

The Motley Fool has no position in any of the stocks mentioned. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

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