Financial News Briefly

Compiled by Kevin Surbaugh

A look around the financial markets today.

Rite Aid (RAD)

Workers in the Cleavland area ended their eight-month strike against Rite Aid (RAD), according to the Cleveland Plain Dealer. According to officials with the United Food and Commercial Workers Local 880 there in Cleavland they reached a three-year contract that will last until 2014.

Neither the union nor the company would reveal terms of the contract. Workers went on strike in March because they said the company, based in Harrisburg, Pa., wanted to dramatically increase the amount workers paid for health care benefits.

Union president Thomas Robertson said the union didn't want to reveal the terms of the settlement because workers in Canton, Akron and Youngstown still must vote on a similar contract.
- Cleveland Plain Dealer

Photo courtesy of ashevillenccommercialrealestate.com

Union officials did say the issues surrounding health care was resolved, but didn't give any further details. A spokesperson for Rite Aid called the deal "fair, and in the best interest of all parties."

Rite Aid stock rose dramatically in trading on Thursday (to close at $1.33) after a falling out between Walgreen (WAG) and Express Scripts which can't agree on a pharmacy benefits management contract. Rite Aid closed yesterday at $1.28.

Walgreen (WAG)

Barrons reports, that Walgreen (WAG) and Express Scripts (ESRX) are in a dispute over a pharmacy benefit management deal.

Walgreen (WAG) is in a dispute with Express Scripts (ESRX) over a pharmacy benefit management deal, and failure to resolve that deal could hurt Walgreen, writes Credit Suisse analyst Edward Kelly. In a note today downgrading the company to Neutral from Outperform, Kelly urges investors to consider Rite Aid (RAD) instead.
- Barrons

According to this report if this deal falls though it will force customers to have to go to other drugstores to get their prescriptions filled, which could benefit Rite Aid (RAD) and CVS Caremark (CVS)if a deal isn't reached by Dec. 31, 2011. Right now according to the media reports it is just a waiting game to see what shakes out between now and the end of the year, but the first of the year could be very jolly for Walgreen's competitors.

Berkshire Hathaway (BRK-B, BRK-A)

The news over the last few days was that the Oracle of Omaha, Warren Buffett and his investment company Berkshire Hatahway had invested more then $10 billion in IBM. This is real buzz among some in the investment community, because Buffett has long had an aversion to buying technology stocks. So this purchase comes as a surprise to many. However, as The Economist points out maybe it shouldn't be such a surprise.

The Sage of Omaha earned his reputation as a tech skeptic when he judiciously avoided hot internet stocks during the dotcom bubble. It is too hard to sort out the few potential winners from the large number of start-ups that are likely to prove ephemeral, his reasoning went.
- The Economist

The article continues to explain that by splashing more than $10 billion in IBM, he is actually investing in the opposite of an transient company, seeing as IBM has been around for 100 years and is looking very healthy.

Disclosure:
The compiler of this piece owns small stakes (less then 5 shares in RAD and BRK-B) while currently owning no stakes in WAG or CVS.
Photo courtesy of ashevillenccommercialrealestate.com

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