Rite Aid CEO Heyward Donigan recently made her first open-market stock purchase since joining the drugstore chain in August 2019.
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Rite Aid has slipped this year, but President and CEO Heyward Donigan bought shares the day after the drugstore chain reported a stronger-than-expected quarter.
Rite Aid stock (ticker: RAD) has fallen 5.8% this year, while shares of peers Walgreens Boots Alliance (WBA) and CVS Health (CVS), as well as the S&P 500 index, are all up by double-digit percentages. Rite Aid was hurt earlier this year by the loss of a large customer account. The company’s fiscal third quarter, reported on Dec. 21, was better than expected on strong earrings before interest, taxes, depreciation, and amortization, or Ebitda. Rite Aid raised guidance while also unveiling a store-closure plan. Shares soared.
On Dec. 22, the day after the report, Donigan paid $200,000 for 14,350 Rite Aid shares, a per share average price of $13.93. According to a form she filed with the Securities and Exchange Commission, Donigan now owns 559,498 Rite Aid shares in a personal account.
Rite Aid didn’t respond to a request to make Donigan available for comment on her stock purchase. This is her first open-market stock purchase since joining Rite Aid in August 2019. Most of the shares she owns were received in the form of restricted shares, which vest in annual installments.
J.P. Morgan analyst Lisa C. Gill reduced loss estimates after the report and raised the price target to $14 from $12, but maintained an Underperform rating on Rite Aid stock. Gill wrote in a research report that “we continue to see a long road ahead for Rite Aid as it executes on the ongoing turnaround…we expect the road will be bumpy.”
Inside Scoop is a regular Barron’s feature covering stock transactions by corporate executives and board members—so-called insiders—as well as large shareholders, politicians, and other prominent figures. Due to their insider status, these investors are required to disclose stock trades with the Securities and Exchange Commission or other regulatory groups.
Write to Ed Lin at [email protected] and follow @BarronsEdLin.
