Rite Aid is making impressive progress, both from a financial and operational point of view, the business is supported by strong secular tailwinds and considerable opportunities for growth at the company level. Besides, the stock offers abundant upside potential from a valuation point of view when compared against bigger and more profitable peers such as Walgreen and CVS Caremark.

2. 3 Simple Reasons to Buy Rite Aid
1- The company is clearly making considerable
progress in terms of business turnaround and
financial performance
2- Long-term industry tailwinds and growth
opportunities
3- Rite Aid is attractively valued in comparison
to bigger peers such as Walgreen and CVS
Caremark

3. Rite Aid is clearly moving in the right direction
- Store base restructuring
- Cost controls
- Increased focus on healthcare services
- Building customer loyalty
- Same-store sales increased 5% in April,
signaling strong demand

4. Source: Rite Aid

5. Source: Rite Aid

6. Source: Rite Aid

7. Source: Rite Aid

8. Industry tailwinds mean growing healthcare
demand in the long term
- Aging population
- Generics wave and technological
advancements of different kinds in the industry
- Broadened healthcare insurance coverage

9. Source: Rite Aid

10. Significant growth opportunities
- Store base expansion
- Wellness remodels
- Loyalty programs and discounts to gain
customers and consolidate the company´s
competitive position.
- Growing portfolio of pharmacy services

11. Net profit margin: moving in the right direction
with ample room for continued improvement

12. Rite Aid is valued at a considerable discount versus
CVS Caremark and Walgreen

13. Foolish takeaway
- Rite Aid is making a lot of progress over the last several
years, both operationally and financially
- Strong secular tailwinds for the industry
- Growth opportunities at the company level
- The company still has room for improvement in terms of
profitability when compared against peers such as Walgreen
and CVS Caremark
- Higher profitability would merit a considerably higher
valuation, so Rite Aid still offers substantial potential for gains

14. Our best pick for 2014 is positioned for explosive
gains, and you can learn more about it via our
special free report. Simply click in the link below.