Jim Cramer’s Latest Stock Picks

8. Walgreens Boots Alliance, Inc. (NASDAQ:WBA)

Number of Hedge Fund Holders: 35

When Cramer was questioned about Walgreens Boots Alliance, Inc. (NASDAQ:WBA), he said:

“The good news… is that Tim Wentworth is really an excellent CEO. The bad news is you’re up against Amazon… But I’m a believer in Tim. I really hope it works. But that is a one tough spot he’s got himself in.”

Walgreens Boots Alliance (NASDAQ:WBA) is a well-known name in the retail pharmacy industry, operating over 12,500 locations across the United States, Europe, and Latin America. The company’s diverse portfolio features well-known brands such as Walgreens, Boots, Duane Reade, the No7 Beauty Company, and Benavides in Mexico. In recent times, the company has faced increasing competition from tech-driven retailers like Walmart and Amazon, which are making significant inroads into the pharmacy sector.

These competitors not only offer extensive loyalty programs, such as Walmart+ and Amazon Prime but also provide the convenience of delivering a broad range of items alongside prescriptions. Such a capability may give them an edge in the online marketplace, challenging traditional pharmacy models like Walgreens.

During its latest earnings call, Walgreens Boots Alliance (NASDAQ:WBA) management provided insights into the company’s future direction, highlighting a plan to close 1,200 underperforming stores. The decision shows that there is an awareness of the need to adapt and modernize in a rapidly changing retail environment.

Tim Wentworth emphasized that out of over 8,000 stores, approximately 6,000 are currently profitable, which supports the belief in a retail pharmacy-led model that remains relevant to consumers. The initiative to close less productive locations is expected to reduce fixed costs and free up resources for reinvestment in the remaining stores over the coming years.