Grocery chain Albertsons to buy Rite Aid to confront Amazon, online threats

Ann Santiago
February 22, 2018

The stock increased 2.40% or $0.05 during the last trading session, reaching $2.13. Price changes in a company's bonds in credit markets sometimes anticipate parallel changes in its stock price.

Immediately following completion of the merger, Albertsons will have approximately 392.9 million shares outstanding on a pro forma and fully diluted basis. "However, drug retailing has had its own challenges, with reimbursement pressure and weak front-end sales as evidenced in Rite Aid's weak profits over the last couple of years". Kimco's investment in the chain was recently valued before the Rite Aid deal was announced at around $140 million, for comparison. The grocery industry as a whole is worth $800 billion and the drug industry is worth about $450 billion in the US, according to Bloomberg. Walgreens is now buying about 2,000 Rite Aid locations. As per Monday, September 11, the company rating was initiated by Loop Capital Markets. The theme-park operator reported GAAP net income of $1.14 per share, up from just $0.02 per share during the same quarter past year and crushing the Capital IQ consensus expecting only $0.12 per share.

Rite Aid Corporation (NYSE:RAD) reported its EPS in the last quarter as $0/Share beating the analyst estimate of $-0.02/Share by a difference of $0.02. The combined group expects to deliver annual run-rate cost synergies of $375m in approximately three years and access potential annual revenue opportunities of $3.6bn. Harvey Cap Inc invested in 80,000 shares or 0.06% of the stock.

Rite Aid, which employs 89,000 people, reported $5.4 billion in revenue in its fiscal third quarter, which ended December 2 of past year. Rite Aid has a 12-month low of $1.38 and a 12-month high of $6.04. The stock has weekly volatility of 3.41% and monthly volatility of 4.15%. Harbor Advisors LLC now owns 80,000 shares of the company's stock worth $157,000 after purchasing an additional 60,000 shares during the period. After all, not only is Rite Aid being acquired, the company is generating a great premium in the process, immediately providing a return of value for shareholders. The new organization is expected to comprise leadership from both companies and be based in Boise, Idaho, and Camp Hill, Pa., where Albertsons Cos. and Rite Aid, respectively, now are based. If we checked progress of the long term moving average 200 SMA, then we noticed downtrend created which can be described as recent trading price is below the 200 SMA level. Late previous year, Rite Aid rival CVS Health Corp. said it would buy the health insurer Aetna for $69 billion. Its beta value stands at 1.73.

This powerful combination enables us to become a truly differentiated leader in delivering value, choice, and flexibility to meet customers' evolving food, health, and wellness needs...

You can get a sense of how sustainable that is by a levered free cash flow of $33.29 Billion over the past twelve months.

The company's stock is now moving with a -ve distance from the 200 day SMA of approximately -11.14%, and has a solid year to date (YTD) performance of 8.12% which means that the stock is constantly adding to its value from the previous fiscal year end price.

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