In a previous article I described Rite Aid (RAD) as a "hold." Based on new information, or rather, based on information I had seen before but which hadn't registered, I have changed my opinion and now believe that RAD is a sell. I reached an erroneous conclusion earlier, because of a "red herring" in the announcement of the merger between RAD and Albertsons.

The red herring was the choice of cash or stock for a portion of the buyout, as reported by the New York Times. "Rite Aid shareholders would get $1.83 in cash and one share of Albertsons stock, or 1.079 shares of Albertsons stock, for every 10 shares of Rite Aid they owned."

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