Rite Aid Shares Continue Earnings-Fueled Rally
Shares of drug store Rite Aid Corporation (NYSE: RAD) rose again on Wednesday. This comes after the company released positive third quarter results on December 20.
Prior to the announcement, Rite Aid shares had been trading around $1. However, following earnings, Rite Aid shares jumped, closing up 17 cents higher than the previous day.
Since then, shares have climbed steadily, and traded near $1.40 on Wednesday, up over eight percent. Shares are near a six month high. On July 11, 2012, Rite Aid traded at a high of $1.43 and has been below $1.40 ever since.
Trading volume has risen noticeably, as well. The 10-day average volume has increased to nearly 18 million. This is up from a three month average of approximately 7.6 million.
The continued climb may be the result of timing. With limited trading activity on Monday and none on Tuesday, traders may be continuing to bid up shares of Rite Aid in the wake of Friday's news.
At least for now, analysts largely favor a “Hold” rating on Rite Aid's stock. Of analysts surveyed by Yahoo Finance, five recommend holding shares, two have a “Strong Buy” rating, one a “Buy” rating and one an “Underperform” rating.
Whether or not Rite Aid is a good investment will largely depend on the company's ability to stay on a positive track. Rite Aid currently sits far behind its main competitors in terms of its share of the industry.
There was even some speculation that Rite Aid could be purchased by Walgreen (NYSE: WAG) earlier this year, indicating the shaky ground that the company has been on in the face of stiff competition.
Of course, demand for Rite Aid's core products -- pharmaceuticals -- won't wane anytime soon in our ever-aging nation.
© 2016 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.