Super Stock Blog

Let's make our own bull run!

Category: Uncategorized

JCPenney Affecting Mall REITS

JcPenney (JCP) had a huge drop this morning in stock price over 17% as of right now.  This was due to declines in profit and same-store sales.  Of course, this is having a huge affect on Mall REITs including one that we current invest in Washington Prime Group (WPG).

Washington Prime Group has a very small percentage of rent that comes from JcPenney. This amounts to less than 2% of the rent.  Again, Sears (SHLD) also is a renter of this mall reit but also accounts for less than 2% and most likely without further due diligence I believe sears is only accounting for 1% of the annual base rent that WPG receives on an annual basis.

For someone that has some retirement funds setup, this is a great time to get into Washington Prime Group and collect a massive dividend at over 10%.

For the fundamental trader, this is a great mall reit that should pay off handsomely in dividends and appreciation as there isn’t much more downside to mall reits.  We all know that Amazon (AMZN) wants in the retail space and purchased Whole Foods for billions of dollars.

For the technical trader, there is a bearish cross which means there is further downside.  I’m not too sure about this but it did break the support at $8.50 today so it is possible to get a better price by waiting it out.

Rite-Aid Becomes Long Term Hold!

Rite-Aid (RAD) just announced earnings and, more importantly, discussed details of the merger deal.  First, the merger deal is off the table.  Walgreens will be paying $325 million for the termination agreement.  However, Walgreens (WAG) is going to purchase half of Rite-Aid stores for $5.2B.  Rite-Aid retains all of its west coast stores but will sell many stores in the other states.

For the long-term outlook, this is a great play on Rite-Aid.  There is a chance that another company possibly even Walgreens (WAG) in the future would be interested in Rite-Aid with the potential for the west coast stores and to own their pharmacy benefit manager.  Rite-aid is valued over $5 with this current outlook.  As long as they can start growing (which they have not in a long long while), there is the potential to move up to $9 which would be their price two years ago before all this merger and acquisition talk.

It is hard to predict where the stock price will be in the short-term.  However, if you wish to play this long-term, there is potential in Rite-Aid.  If another company wishes to acquire the remaining Rite-Aid, there is a good change you can double your money but don’t expect this to happen anytime soon.

Double Your Return in One Month with Rite-AID!

The Rite-Aid – Walgreens merger saga is coming to an end after two years of merger approval issues.  The end result will be $6.50-$7.00 of cash out per each Rite-AID (RAD) share.  I believe it will end up being at $6.50.  The stock is trading currently at $3.83 which means you will double your money on closing.  The only thing that can hold this up is if FTC blocks the merger.  With Amazon coming to the retail pharmaceutical business, I do not see an argument that FTC can make to block the merger.

The FTC would be doing a disservice to prevent this merger.  Amazon already has a hold of the retail market.  It wouldn’t be tough for them to change their structure to take over the pharmacy business as well.  Amazon can easily make a subscription model to customers that need antibiotics, cough syrups, medicines, etc. without going to your local CVS, Walgreens, Fred, Rite-AID, etc.  that would be cheaper and require less employees.

If you like to gamble, feel free to pick up some Rite-AID (RAD) shares.  The company is also coming out with earnings on Thursday so there is a lot of public news that will be out this week and next week.  The price was recently at $4 a share but has gone down to $3.81 this morning making this a good purchase.  If at worse case they do not merge, Rite-Aid will definitely go down to $2 per share which would still be a nice buy for a company that other competitors are interested in purchasing.

Disclosure: Long RAD stock and Long with RAD naked puts

Energy Fuels Reaching New Highs

As I discussed earlier, I was expecting to see new highs on UUUU with the volume and technical indicators turning bullish.  It is currently at $2.66 with a move up of 6% in this morning.  Expect this stock to continue to go up and down but the long-term road is for it to keep moving up.  Bet on US especially if you have the POTUS planning his executive orders to be made for “America to win.”