Rite Aid Slumps, Best Buy Bumps as New Model Takes Form

Wal-Mart maintains momentum despite Dow's Friday drop

Mar 21, 2014 at 6:25PM

Stocks briefly reached weekly highs on Friday, only to retreat in afternoon trading to finish in the red. Selling in the health-care sector caused the otherwise-balanced market to lose ground, as regulatory scrutiny in the biotech space highlighted risks for investors. With no important new data to focus on, the Dow Jones Industrial Average (DJINDICES:^DJI) sold into the weekend, shedding 28 points, or 0.2%, to end at 16,302. 

Wal-Mart (NYSE:WMT) shareholders didn't see much reason to worry about the biotech space, bidding shares 1% higher Friday. The stock has enjoyed a modest bump since announcing its entry into the used video game business earlier this week. The area isn't big enough to be a game changer for Wal-Mart, but considering the hefty margins in the space, it's economical and likely a shrewd move. Wal-Mart already sells video games, so it won't need to build new wings for its locations, or devote much more of its precious square footage to enter the market.

Wal-Mart's move is, overall, a negative for electronics retailer Best Buy (NYSE:BBY), which, behind Game Stop, is the biggest player in video game trade-ins. With that in mind, Best Buy's 4.3% pop today might seem like a head-scratcher, but investors were correct to dismiss the new competition as immaterial. Best Buy is making major changes to its store plans, adapting to its new role as the premier electronics showroom. By inking deals with the likes of Samsung, Microsoft, and SolarCity, the company has bigger concerns than giving college students beer money for their Zelda games.

Finally, shares of Rite Aid Corporation (NYSE:RAD) lost 3.4% Friday. Investors in the drug store have been amply rewarded in the last year, as Rite Aid's finances have flourished. By shutting down unsuccessful locations, and growing same-store sales through pharmacy revenue gains, it's built itself a nice little bandwagon fan base on Wall Street. as shares rallied 245% in the last year. One recent threat to the Rite Aid gain train is pressure from state regulators for drug stores to cease all tobacco sales, which not only generate foot traffic, but provide ancillary sales from other in-store offerings.

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

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4 in 5 Americans Are Ignoring Buffett's Warning

Don't be one of them.

Jun 12, 2015 at 5:01PM

Admitting fear is difficult.

So you can imagine how shocked I was to find out Warren Buffett recently told a select number of investors about the cutting-edge technology that's keeping him awake at night.

This past May, The Motley Fool sent 8 of its best stock analysts to Omaha, Nebraska to attend the Berkshire Hathaway annual shareholder meeting. CEO Warren Buffett and Vice Chairman Charlie Munger fielded questions for nearly 6 hours.
The catch was: Attendees weren't allowed to record any of it. No audio. No video. 

Our team of analysts wrote down every single word Buffett and Munger uttered. Over 16,000 words. But only two words stood out to me as I read the detailed transcript of the event: "Real threat."

That's how Buffett responded when asked about this emerging market that is already expected to be worth more than $2 trillion in the U.S. alone. Google has already put some of its best engineers behind the technology powering this trend. 

The amazing thing is, while Buffett may be nervous, the rest of us can invest in this new industry BEFORE the old money realizes what hit them.

KPMG advises we're "on the cusp of revolutionary change" coming much "sooner than you think."

Even one legendary MIT professor had to recant his position that the technology was "beyond the capability of computer science." (He recently confessed to The Wall Street Journal that he's now a believer and amazed "how quickly this technology caught on.")

Yet according to one J.D. Power and Associates survey, only 1 in 5 Americans are even interested in this technology, much less ready to invest in it. Needless to say, you haven't missed your window of opportunity. 

Think about how many amazing technologies you've watched soar to new heights while you kick yourself thinking, "I knew about that technology before everyone was talking about it, but I just sat on my hands." 

Don't let that happen again. This time, it should be your family telling you, "I can't believe you knew about and invested in that technology so early on."

That's why I hope you take just a few minutes to access the exclusive research our team of analysts has put together on this industry and the one stock positioned to capitalize on this major shift.

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David Hanson owns shares of Berkshire Hathaway and American Express. The Motley Fool recommends and owns shares of Berkshire Hathaway, Google, and Coca-Cola.We Fools don't 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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