We recently compiled a list of the 10 S&P 500 Stocks on Jim Cramer’s Radar. In this article, we are going to take a look at where Walgreens Boots Alliance, Inc. (NASDAQ:WBA) stands against the other S&P 500 stocks.
Jim Cramer, host of Mad Money, recently discussed the current state of the market and also discussed both the leading and lagging stocks within the S&P 500. He posed an intriguing question: What if Trump’s tariffs are more negotiable than expected? Instead of a hard-line approach, Cramer suggested they could end up being more like a “steak knife” than a “meat axe,” meaning less harmful to trade and international relations.
READ ALSO Jim Cramer Discussed These 10 NASDAQ 100 Stocks Recently and 8 Stocks on Jim Cramer’s Radar
While a more reasonable tariff policy might not be ideal for global trade, it would be a positive development for stocks, particularly if it results in lower prices for American consumers or if multinational companies move their manufacturing to more favorable countries. Cramer emphasized that, for stockholders looking for growth, hopes should be placed on negotiable tariffs.
“If you own stocks and you want them higher, you have to hope for negotiable tariffs that could cause countries to lower prices to us or make multinational companies move their manufacturing base here to a more friendly country.”
Cramer also discussed the S&P 500’s performance this year, noting that, while it is clear which stocks have thrived in the Nasdaq, the winners and losers in the broader S&P 500 have been more difficult to pinpoint.
Additionally, Cramer mentioned that several of the stocks in his Charitable Trust, which are reliant on a rebound in China, are ones he’s not excited about at the moment, especially considering the disappointing Chinese economic data. He mentioned that his dismay for such stocks will only last until “they annualize the crummy Chinese numbers and then they’ll probably bounce back.”
Our Methodology
For this article, we compiled a list of 10 stocks that were discussed by Jim Cramer during the episode of Mad Money on January 2. We listed the stocks in the order that Cramer mentioned them. We also provided hedge fund sentiment for each stock as of the third quarter, which was taken from Insider Monkey’s database of 900 hedge funds.
Why are we interested in the stocks that hedge funds pile into? The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter’s strategy selects 14 small-cap and large-cap stocks every quarter and has returned 275% since May 2014, beating its benchmark by 150 percentage points (see more details here).
A pharmacist discussing the health benefits of a prescription medication with a customer.
Walgreens Boots Alliance, Inc. (NASDAQ:WBA)
Number of Hedge Fund Holders: 33
Cramer started the list of S&P 500’s losers in 2024 with Walgreens Boots Alliance, Inc. (NASDAQ:WBA) and said:
“How about the S&P’s biggest losers? Wow, they are powerful, powerfully bad. Starting with Walgreens, down 64%. Here’s a company that needs a buyer or buyers, maybe some for the front of the store, decimated by Amazon, some for the back, which could be used as a dispensary for all sorts of drugs. CEO Tim Wentworth, he’s real good.
He’s closing money, losing stores, offering free one-hour delivery, has a series of incredible bargains on the homepage, check it out. But the balance sheet’s just not so hot and to truly turn around, well, Walgreens needs other pharmacies to go under so it can raise prices. Either that or it needs to break up different parts of the enterprise and sell them off. Down here, though I would not bet against Wentworth… you can’t if the stock’s just too low.”
Walgreens Boots Alliance, Inc. (NASDAQ:WBA), while a major player in the retail pharmacy industry, has faced considerable financial challenges in recent years, with its stock plummeting by over 80% in the past five years. This decline has largely been driven by heightened competition from tech-driven retailers like Walmart and Amazon.
The company is undergoing a turnaround plan that includes considering asset sales, implementing cost-cutting measures, and closing 1,200 underperforming stores. CEO Tim Wentworth pointed out that despite these difficulties, around 6,000 of its 8,000 stores are still profitable. Additionally, in early 2024, the company made a significant move by cutting its dividend yield by 48%, with a focus on better capital allocation.
After The Wall Street Journal reported in December that Walgreens Boots Alliance, Inc. (NASDAQ:WBA) is in discussions to be acquired by private equity firm Sycamore Partners, Morgan Stanley analyst Erin Wright stated that while the firm understands the context of a potential sale amid a challenging pharmacy environment, a buyout is difficult to envision due to Walgreens’ significant debt and low cash flow, which complicates the value creation potential. Wright has assigned an Underweight rating to the stock.
Overall WBA ranks 6th on our list of the S&P 500 stocks on Jim Cramer’s radar. While we acknowledge the potential of WBA as an investment, our conviction lies in the belief that AI stocks hold greater promise for delivering higher returns and doing so within a shorter timeframe. If you are looking for an AI stock that is more promising than WBA but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
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Disclosure: None. This article is originally published at Insider Monkey.