Tomahawk, WI 12/23/2013 (BasicsMedia) – The retail drugstore Rite Aid Corporation (NYSE:RAD) posted significant profit and revenue jump for fiscal third quarter. But shares slumped shortly after the announcement that the company expected a lackluster season in the upcoming months. So we are here asking, should you pick up this stock at this point when the price is low or should you wait to see where the cat jumps?

You can add a stock to your investment portfolio when it is dropping yet there are strengths which sort of guarantee rebound. But it can be hurting to jump onto a stock that is not showing any strength. Is Rite Aid Corporation (NYSE:RAD) showing strength?

It all begins by looking at Rite Aid Corporation (NYSE:RAD)’s performance history with a first look at the latest quarter. As has been mentioned, retail drugstore posted profit that was up 16 percent against the corresponding quarter last year. It earned $71.5 million or $0.04 per share. Last year it earned $61.9 million in profit, leading to share distribution of $0.07 per piece.  The revenue for the just reported quarter was $6.36 billion, up 2 percent from a year ago.

On their part, analysts hoped to seen revenue of $6.32 billion and $0.04 earning per share.

Impressive performance record

With the latest quarter profits, Rite Aid Corporation (NYSE:RAD) has now posted five straight quarters of quarterly profits. Compared to peers, this is a widely positive performance.

Going forward, the company is implementing cost-reduction and margin improvement efforts which are expected to better its profits in the upcoming quarters. Moreover, the company is expanding its market share and this is expected to boost sales and thus top-line.

The tragic challenges which affected the company’s operations last year and which resulted in hurting results this year are not expected in the coming year. The company’s product pipeline is also another particular strength area which is expected to boost its profits.

In a largely solid business environment, Rite Aid Corporation (NYSE:RAD) can be expected to start returning big money to investors in 2014. Investors can look up to increased shares buyback and possible dividend improvement.

Why bleak out look?

If it is said that Rite Aid Corporation (NYSE:RAD) is poised for great things going into 2014, it should be contradicting that the company’s management sought to warn of poor performance in next year. Well, what the management said as possible reasons for lower gains in its 2014 operations are tied to particular few factors which may not may not affect the company’s overall performance. It is in this situation that we say the management is being conservative so that it doesn’t fall off its target when things don’t actually work out well.

In particular, Rite Aid Corporation (NYSE:RAD)’s CEO John Standley mentioned the waning benefit new generic medicines which have been a contributor to the company’s growth in 2013. Yet other challenges are seen in form of competitive promotion and cautious customer spending.

Point to note: As a company, Rite Aid Corporation (NYSE:RAD) cannot merely sit back and watch competitors up their promotional campaigns. We expect it to do the same to shield its market share. As for the slowed down customer purchasing power, things can always improve overnight.

Generally, as much as next year may be viewed narrowly by Rite Aid Corporation (NYSE:RAD) management, the company has particular strengths which cannot be distracted by the outlined challenges.

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