Friday, April 03, 2009

Rite Aid Finally Tidies Up

Rite Aide (RAD) announced Q4 results and year end calamities. They are dangerously close to losing their listing on NYSE and the stock has languished for years. Some stores opened, some stores closed, some got a paint job. They finally got around to writing down good will which has puffed up the financial statements. The press release is bland and talks about doing all the usual things; improve revenues, cut costs and reduce debt.

Given the languishing share price and huge over hang of debt all that is needed is a cash buyer who can come in and scoop up all the remaining chips. It should not take much more except maybe a little bit of long term optimism in the economy. Management is not sounding encouraging about anything. Why are they so boring right about now? Usually you buy because of great management. The new buyer would not appreciate the corporate drum beating up the share price. So who is the management group working for at this time?

The shareholders deserve a little bit more enthusiasm at this point.