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Jim Cramer has been bullish on Rite Aid for (RAD) for some time on the prospect that it will turn around its business by revamping its stores. It demonstrated that locations that had a facelift generated much more traffic. However, its comeback seems to have gotten up and left, at least for the time being, given the “horrendous” guidance management reported in its recent quarter.
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Management discussed “unforseeable” problems in its generics business and reimbursement rates, but Cramer isn’t buying these explanations, and thinks the company should have known about them and pre-announced weakness ahead of the quarter. “This is unacceptable. To say this was not foreseeable? I want an explanation.” Right now, Cramer prefers CVS Caremark (CVS).
ConAgra (CAG) is a company that does seem to be turning around successfully, and has gotten over headaches from its Ralcrop acquisition. Some of its formerly no-growth brands are seeing increasing sales, and Cramer prefers ConAgra to General Mills (GIS). However, the packaged goods stocks Cramer is recommending are those connected to the healthy eating trend, such as WhiteWave (WWAV) and Hain Celestial (HAIN).
