In my opinion, any and every pullback in shares of Rite Aid Corporation (NYSE:RAD) should be acquired rapidly. This is a company that is not moving on speculation. It is a stock that was trading at $1.00 back when clear fundamental improvements were taking place; as investors had no trust after years of disappointment. Thus, with its recovery still in its infancy, I think Rite Aid could trade like First Solar, Inc. (NASDAQ:FSLR), with another leg to its rally.
Alcatel Lucent SA (NYSE:ALU) has some of the greatest potential in the market – and I have loudly expressed my satisfaction with the company’s restructuring program – but the company has since backed out of its plan, which could have led to a thinner and leaner yet more efficient Alcatel Lucent SA (NYSE:ALU).
In a recent article, I detailed its “new plan” and how nearly everyone who supported the “original plan” has since left the company. The company had taken $2 billion from Goldman Sachs to restructure its business, but is now only planning to cut costs and complete the sale of its submarine optical unit.
This near $20 billion per year company could have sold its Optics, Managed Services, and its Fixed Line business and could have achieved significant profitability. Instead, the company “chooses” to stay large with operating margins of just 0.37%. With these things considered, I’m not sure how there can be a second leg to its rally.
Final thoughts
Alcatel Lucent SA (NYSE:ALU) has doubled from its 52-week lows, which is when the restructuring plan was first announced. Thus, all of its gains are related to the original plan of drastic asset divestments. As a result, with these changes not occurring, I believe it is only a matter of time before Alcatel begins a decline in valuation; although I’d love to see the company succeed.
I think Rite Aid Corporation (NYSE:RAD) will see a First Solar, Inc. (NASDAQ:FSLR) like pop, and after a period of consolidation, rally even higher. In “this article” I detail the level of value that is present in shares of Rite Aid, and I believe that investors are simply taking a breather, as part of a healthy pullback, prior to new highs being created. With that said, I’d watch the stock closely.
The article Will These 2 Stocks See a Second Move Higher? originally appeared on Fool.com.
Brian Nichols is long RAD. The Motley Fool has no position in any of the stocks mentioned. Brian is a member of The Motley Fool Blog Network — entries represent the personal opinion of the blogger and are not formally edited.
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