Diamonds and Dogs
Rite Aid (RAD) is the diamond today soaring 40% to $8.50 a share on rumors Walgreens will make an offer to buy the drug company for $10 billion. The deal would combine the second and third largest drug-store operators, intensifying the already fierce competition with CVS Health. The tie up would mark a tectonic shift in the market as pharmacy operators grapple with the rapidly changing health-care industry. CVS has 58% market share in the pharmacy and drug store business, Walgreens controls 31% and Rite Aid has 10%, according to research firm IBISWorld. The industry has $263 billion in annual revenue and $10.3 billion in profits. For Rite Aid shareholders, let's hope the deal is true.
GrubHub (GRUB) is the dog of the day down 23% following disappointing earnings. The online food order and delivery company, reported third-quarter profit and revenue below market expectations hurt by higher costs and service disruptions. During the third quarter, the company faced service outages in the quarter as it moved to a new technology platform. They blamed "dry weather" for being a drag on revenue. GrubHub typically sees a surge in orders during colder weather. The fourth-quarter isn't looking any better as forecasted revenue will miss analysts' estimates. At least they didn't say their dog ate their profits.
Diamonds and Dogs market commentary is a journal of daily observations on anything that happens to be of interest to our author. Obviously, our primary focus is the stock market and world economic events, but for this page we have no defined topics. We want this page to be dedicated to the interests, concerns, and possibly to the financial gain of our clients and friends. All comments contained herein are for informational purposes only, and should not be considered as a solicitation to buy or sell any security. The firm does not guarantee the accuracy or completeness of the information or make any warranties regarding results from it's usage.