Treating Stocks As Businesses Still Works

Last month, I made fun of the fact that Fred’s stock had skyrocketed over 85% on the news that it was set to acquire 865 Rite Aid locations.

My reaction to the news included the following:

“Investors are speaking as if Fred’s got a ‘steal’ by getting each location for a cost of $1.1 million. I do not share in that sentiment. My view is that Fred’s purchase of 865 Rite-Aid locations will, in hindsight, prove to be a classic case study of the kind of market folly that pops up whenever you have a rising market mixed with cheap credit for corporate borrowers.

Despite having 4,600 locations, Rite Aid only brings … Read the rest of this article!