Balm for Your Portfolio

Nearly 18 months ago, I recommended Rite-Aid (RAD) after I researched the stocks based on the recommendation of an extremely smart friend and insightful investor. (He is the chief financial officer of a publicly traded company, to boot!) As is often the case, patience is being rewarded. The stock treaded water for the next nine months, but Rite-Aid has been a rocket ship this year, with shares up nearly 500%. Naturally, that sort of appreciation raises the question of whether I should lock in profits or let my winners run.

Rite Aid (RAD) -- Daily Source: Yahoo! Finance View Chart » View in New Window »

As is usually the case when a stock is soaring, striking earnings performance is usually the cause. Rite-Aid recently reported blow-out earnings, with a 45% rise in earnings before interest, taxes, depreciation and amortization -- to $318 million -- in the second quarter. That's far ahead of the Street consensus of $238 million. Management also raised full-year guidance by 10% due to this momentum, and the company now expects to book more than $1.2 billion in EBITDA....347 more words left in this article. To read them, just click below and try Real Money FREE for 14 days.

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