We recently published a list of 7 Consumer Goods and Retail 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 consumer goods and retail stocks on Jim Cramer’s radar.
Jim Cramer, host of Mad Money, recently took a close look at market trends and explained why many stocks are continuing to struggle, specifically in sectors like consumer goods. Cramer pointed out that the ongoing bear market is showing no signs of easing, with stock prices persistently declining day after day.
While Cramer acknowledged that inflation remains a concern, with the Federal Reserve continuing to highlight the issue, he encouraged investors to keep in mind the underperformance of these key sectors.
“This is a market that rewards growth regardless of price. So, people will pay up for tech growth, which is all about real demand and pricing power, and they’re avoiding companies that have lost pricing power and offer yields that are too low to compete with Treasurys. I don’t expect that dynamic to change any time soon.”
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“They spent last year hurting the market and this year already many are in the red. It’s not just a continuation people, it’s actually an acceleration.”
He also highlighted that while tech stocks related to artificial intelligence and advanced computing have helped prop up the market, many other sectors have been facing significant challenges. Cramer singled out industries such as real estate, healthcare, housing, biotech, materials, and food, sectors that underperformed dramatically last year and are showing similar weaknesses this year.
“Bottom line: When you look at these super underperforming stocks, all I can say is, maybe the Fed had better be careful for what it wishes for. Companies that represent a gigantic chunk of the real economy have seen their stocks swoon. Could their earnings be that far behind, and could inflation be running its course a lot faster than expected?”
Our Methodology
For this article, we compiled a list of 7 stocks that were discussed by Jim Cramer during the episode of Mad Money on January 6. 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 of 2024, 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 talked about how companies like Walgreens Boots Alliance, Inc. (NASDAQ:WBA) are striving to keep their prices low.
“Let’s open the discussion, pricing.… I know that Walgreens has tried to keep up offering their own outrageously lower prices on their website, but you probably don’t go to their website.”
Walgreens (NASDAQ:WBA), a key player in the retail pharmacy sector, has faced significant financial hurdles in recent years, with its stock value dropping over 78% in the last five years. The decline has been primarily linked to increased competition from tech-driven retail giants like Walmart and Amazon. As part of its efforts to address these challenges, it has implemented a series of measures, including announcing thousands of store closures and launching a $1 billion cost-cutting program.
The company is also considering divesting its non-core businesses in an attempt to reignite growth. For the fiscal 2025 first quarter, the company reported a loss of $265 million, worse than the $67 million loss reported during the same period last year. The quarterly loss includes costs related to the company’s footprint optimization program, among other reasons. Despite the loss, CEO Tim Wentworth highlighted that the company has made “early progress” in its turnaround plan, although he acknowledged that recovery will take time.
Management also noted that the broader consumer environment remains challenging, with ongoing shifts in retail channels and a tough promotional landscape affecting discretionary product categories. Despite these struggles, Walgreens (NASDAQ:WBA) exceeded expectations in its fiscal 2025 first-quarter results, driven by cost control efforts. However, its retail gross margin declined due to pricing, promotions, and weaker sales of cough, cold, and flu products.
Overall, WBA ranks 4th on our list of consumer goods and retail 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 time frame. 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.
