Why Rite Aid Is Poised to Pull Back

Market-lagging returns could be written in this 1-Star.

Brian D. Pacampara, CFA
Brian D. Pacampara, CFA
Feb 14, 2013 at 7:31PM
Consumer Goods

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, and see what CAPS investors are saying about the stock right now.

Rite Aid facts


Headquarters (founded)

Camp Hill, Pa. (1927)

Market Cap

$1.5 billion


Drug retail

Trailing-12-Month Revenue

$26.1 billion


Chairman/CEO John Standley

CFO Frank Vitrano

Return on Equity (average, past 3 years)



$263.6 million / $6.2 billion


CVS Caremark (NYSE:CVS)

Walgreen (NASDAQ:WBA)

Wal-Mart (NYSE:WMT)

Sources: S&P Capital IQ and Motley Fool CAPS.

On CAPS, 17% of the 1,007 members who have rated Rite Aid believe the stock will underperform the S&P 500 going forward.

Just yesterday, one of those Fools, All-Star spiritof78, succinctly summed up the Rite Aid bear case for our community:

Nice market position but improperly executed. ... The stores should be more locally centric (but with national buying power) to provide small dollar high volume sales to consumers. Their debt to capital ratio is just unsustainable even with an improving economy.

Want to see how well (or not so well) the stocks in this series are performing? Follow the TrackPoisedTo CAPS account.