I don't need to work; I do this because I love it. It's like nothing else in the world.
I've been in the markets for more than 35 years.
I've worked in the pits as a market-maker. By 1982, I was running my own hedge fund, right from my very own seat on the Chicago Board Options Exchange; I helped develop the VIX "Fear Gauge" there, too.
I've spent years as an insider on high-volume trading desks at top American and British banks and brokerages.
Over my career, I developed proprietary trading strategies to help my clients - famous actors, directors, producers, Chicago and New York banking players - amass fortunes, just like the one I built for myself.
There is one thing I've NEVER done, though: follow the herd.
I've got zero time for mainstream analysts, pundits, or television stock-pickers. Sure, they might get lucky once in a while - even a busted clock is right twice a day - but they'll never, ever be able to do what I do every day.
Many of them don't have the experience; I was working on my third and fourth million before most of these guys took their first bite of solid food.
But mostly, they don't have the guts to go after the REALLY big plays; they don't have the vision to see how putting down a little speculative capital could net serious profits.
Well, that's what we're going to do today.
We're looking at a move no one else has the guts to make, today of all days. We're likely going to be laughing all the way to the bank when the herd realizes what it's missed out on...
[mmpazkzone name="in-story" network="9794" site="307044" id="137008" type="4"]
You Won't Get a Shot Like This Anywhere Else
Let's take a little risk today. If it works out, it could land us a super-enviable long-term investment holding.
The risk will become clear in a second, so I'm going to suggest a stop to protect ourselves. We're going to be bold, but not foolhardy.
DO NOT SHARE: Our cannabis advisory board just revealed their most coveted strategies to help Members lock in ground-floor opportunities in this controversial sector. Get the details here, but please don't share with "non-cleared" individuals...
The play is Rite Aid Corp. (NYSE: RAD) stock for around $0.54 a share.
To put that in perspective for you, that's around 22% of the price of a venti black coffee at your local Starbucks. In fact, it's about what my paid subscribers might shell out for a cheap options play in one of my research services.
If it works - if things break the way I think they could - we could be sitting pretty, holding stock worth several dollars a share, or possibly a lot, lot more.
So let me show you why I think that could happen.
There's Little Downside Vs. Lots of Upside Here
Rite Aid is a mess. I know that, and you probably know that. Any first-year Wall Street analyst knows it, too.
Management has been horrible.
MARIJUANA MILLIONAIRES' SECRET: This proprietary database of every single cannabis stock in existence is like a "cheat sheet" for discovering the next company with seven-figure windfall potential. Learn how to access its contents right here.
But that's just been changed up; top executives and 400 managers got chucked out in a big shakeup. That's all to the upside.
The problem right now with Rite Aid is its debt load. There's about $3.42 billion of it on the books, against around $419 million in cash and negative levered cash flow of $2.21 billion.
That's a problem, but it's by no means insurmountable, and I'll tell you why...
What Rite Aid has going for it, besides more than 2,500 stores around the country, is more than $21.60 billion in annual revenue.
Granted, that nets down to $546 million in EBITDA and a net loss of almost $900 million last year, but it's still a ton of revenue for the "right hands" to work with.
What didn't work for Rite Aid was a proposed merger with grocery behemoth Albertson's.
Greedy shareholders thought the deal didn't value Rite Aid's pharmacy benefits management (PBM) business properly and squashed the deal.
I've been around the block a few times, and from my point of view, those shareholders made a colossal mistake - hey, no vision - one that could very well cost them... and line our pockets.
NO SHEEP NEED APPLY: I'm looking for GUTSY people to learn a bold, unorthodox trading style that could open up life-changing wealth. If you've got what it takes, click here to sign up for my free April 18 online presentation...
So, what we have in Rite Aid is a company in trouble, but in the right businesses, especially its PBM business, with real estate and that's embedded in the communities it serves.
While Rite Aid's not a likely buyout candidate or even a likely merger candidate, those possibilities exist. And if something like that happens, we'll be cheering it on all the way.
But that's not likely. However, what is likely is partnerships with the likes of insurers to serve their PBM needs.
There's a lot that good management can do with Rite Aid. It will take some more borrowing to accomplish, or an outside investment, but there's an awful lot to work with.
Let's take a look at the best- and worst-case scenarios...
There Are Two Ways This Could Play Out
In the long run, if the company pulls itself out of the hole it's in, shares could skyrocket, especially considering we're launching from $0.55 a share.
Rite Aid is reporting earnings today, a little later this morning. The consensus is markets should prepare for disappointment. No one is expecting very much today, and I'm not either.
But then again, if the shares go down some more, our entry is that much more attractive; our upside is that much richer.
And if, on the off chance, there's a beat, that's all to the good. I don't think it'll make much of a difference today, but this is a long-term speculative play, after all.
On the downside, if the company seeks bankruptcy protection, our stop triggers, and we're out with a could-be-worse 25% loss... and most importantly, the appetite to fight another day.
To me, the risk is worth the reward. I made a fortune for myself leveraging situations like this.
So, let's roll the dice.
Set aside whatever speculative capital you're comfortable with and grab some Rite Aid shares today. Set yourself a 25% trailing stop.
Let's see how the new management team does and what partnerships are entered into that can push Rite Aid higher.
Our Top Cannabis Stocks for 2019
Today, you can access our cannabis advisory board's most coveted strategies and in-depth investing research to help you get in on the ground floor of this explosive industry with the potential to generate millions in new wealth for regular people.
These "seven-figure secrets" are designed to help you make a fortune off little-known cannabis companies.
This opportunity, however, is not to be shared with non-cleared individuals. Click here to learn more.
Follow Money Morning on Facebook and Twitter.
About the Author
Shah Gilani boasts a financial pedigree unlike any other. He ran his first hedge fund in 1982 from his seat on the floor of the Chicago Board of Options Exchange. When options on the Standard & Poor's 100 began trading on March 11, 1983, Shah worked in "the pit" as a market maker.
The work he did laid the foundation for what would later become the VIX - to this day one of the most widely used indicators worldwide. After leaving Chicago to run the futures and options division of the British banking giant Lloyd's TSB, Shah moved up to Roosevelt & Cross Inc., an old-line New York boutique firm. There he originated and ran a packaged fixed-income trading desk, and established that company's "listed" and OTC trading desks.
Shah founded a second hedge fund in 1999, which he ran until 2003.
Shah's vast network of contacts includes the biggest players on Wall Street and in international finance. These contacts give him the real story - when others only get what the investment banks want them to see.
Today, as editor of Hyperdrive Portfolio, Shah presents his legion of subscribers with massive profit opportunities that result from paradigm shifts in the way we work, play, and live.
Shah is a frequent guest on CNBC, Forbes, and MarketWatch, and you can catch him every week on Fox Business's Varney & Co.