Gulfport, Rite Aid, Walgreen: Valuable Wallflower Stocks

Gulfport, Rite Aid, Walgreen: Valuable Wallflower Stocks

Last week’s sell off saw some big names falling off the cliffs. Stocks that gained handsomely in the rally so far, such as Gulfport Energy Corporation (NASDAQ:GPOR), Rite Aid Corporation (NYSE:RAD), and Walgreen Company (NYSE:WAG) were natural targets for investors to dump. However, this does not necessarily mean there is anything wrong with these stocks. Here is a closer look:

Gulfport Energy Corporation Logo

Gulfport Energy Saw Huge Strides in Recent Years

As the name suggests, Gulfport Energy Corporation (NASDAQ:GPOR) is an oil and natural gas exploration and production company. From annual sales of $86 million in 2009, the company has expanded itself to a $249 million a year corporation, which is indicative of the huge strides it has made in recent years. In line with top line growth, profits also grew threefold during the period. This growth company does not pay dividends but compensates by offering excellent capital appreciation potential. Despite the 12 percent drop last month, Gulfport Energy’s stock has 12 month returns running in three digits. Currently trading at a forward earnings ratio of 21.8, this may not be the most attractive stock but continuously increasing production at its Utica plays offers great hope. Analysts mostly have positive reviews about Gulfport energy and the stock with target prices well in excess of 20 percent from current levels.

Qualivian Investment Partners 2Q22 Investor Letter

TD1655 Newsletter Placement 1Dear Friends of the Fund, Please find enclosed our Q2 2022 investor letter for your review.  Qualivian reached its four-year mark in December of 2021. We are actively weighing investment proposals. Please refer to our Q2 2022 investor letter for our performance and commentary on the second quarter of 2022. A fact sheet is 

Drug Store Stocks Need a Booster Dose

Shares of Pennsylvania headquartered retail drugstore chain Rite Aid Corporation (NYSE:RAD) have doubled over the past 12 months but shares have come under pressure lately, losing 11 percent during the last week. It may be a good time to initiate long calls in this stock, depending on individual investors’ risk appetite. The stock trades at an attractive forward price earnings ratio of 11.4. In the most recent quarter, the company swung to profits of $89.7 million from a loss of $28 million in the same period a year ago. Where the company is facing issues is in boosting its sales income. During the last four years, its top line has remained largely the same, as grocery store chains such as Wal-Mart Stores, Inc. (NYSE:WMT) and Target Corporation (NYSE:TGT) are gradually eating into drugstores’ business. This is a real risk and has the potential to eat into the cost savings it has undertaken in recent times. The company only recently started generating profits after a long spell and still lags the overall industry on most profitability metrics.

Walgreen Bulked Under Pressure

Similarly, shares of Walgreen Company (NYSE:WAG) have buckled under pressure after the company undershot street expectations while reporting its fiscal third quarter results. Although the company said its sales grew 3.2 percent to $18.3 billion and profits jumped by 16.2 percent to $624 million during the quarter, market clearly had higher expectations from the company. As a result, shares have been sent down by nearly 8 percent since the results were announced. However, there is a counterview that the dip can be used to buy into the stock as the company is one of the strongest performers in the industry. The stock’s forward price earnings ratio of 12.2 and a dividend yield of 2.4 percent further lend credence to this view. The company’s profitability is in line with the industry if not better and price by sales ratio of 0.6 indicates some undervaluation too.

Overall, Gulfport Energy Corporation (NASDAQ:GPOR) has a predictable trajectory and can be reasonably expected to reward investors. However, Rite Aid Corporation (NYSE:RAD) has bigger challenges to face and thus, this stock may not be suitable for investors with weak stomachs. A better fit may be Walgreen Company (NYSE:WAG) which is a more established player in selling drugs through retail chains and has a better track record of navigating through tough times.

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