8. Walgreens Boots Alliance Inc. (NASDAQ:WBA)
Number of Hedge Fund Investors: 35
Jim Cramer has expressed concern about Walgreens Boots Alliance Inc. (NASDAQ:WBA), noting that its stock has been consistently declining, partly due to its significant debt. He highlights that while Walgreens Boots Alliance Inc. (NASDAQ:WBA) has valuable assets it could sell to address this issue, there is a pressing need for these sales to happen quickly. Otherwise, the situation might worsen before it improves.
“This giant pharmacy chain has seen its stock go down and down and down, somewhat because of its debt burden. Fortunately, Walgreens has some assets it can sell. Unfortunately, if it doesn’t sell them quickly, I fear things will get worse before they get better. The situation is so murky because Walgreens needs to refinance billions of dollars at rather high rates, and all of the sale-leaseback deals these guys did in order to raise money will only complicate things further. They sold the land on many of their stores, and now they’re renters. The simple truth is that Walgreens must raise capital, or stock buyers will remain on strike.”
Walgreens Boots Alliance Inc. (NASDAQ:WBA) is a strong investment opportunity due to its strategic moves in healthcare and its attractive dividend yield. Walgreens Boots Alliance Inc. (NASDAQ:WBA) is enhancing its role in the healthcare sector by expanding its U.S. Healthcare segment with VillageMD and CareCentrix. This expansion targets the rising demand for value-based, primary, and specialty care, promising long-term growth.
Walgreens Boots Alliance Inc. (NASDAQ:WBA)’s investments and partnerships are transforming its traditional pharmacy business into a more comprehensive healthcare provider, potentially increasing revenue and driving future growth. Walgreens Boots Alliance Inc. (NASDAQ:WBA)’s extensive retail footprint across the U.S. and internationally supports its steady demand for pharmaceuticals and healthcare products. Despite facing some market challenges and stock volatility, Walgreens Boots Alliance Inc. (NASDAQ:WBA)’s large-scale and ongoing investments in healthcare and digital capabilities make it a solid long-term investment.
Its impressive dividend yield of around 8% is particularly appealing to income-focused investors, adding value amid market uncertainties. Analysts view Walgreens Boots Alliance Inc. (NASDAQ:WBA) as a potential value play, with its discounted valuation and transformation efforts enhancing its investment attractiveness.
Ariel Appreciation Fund stated the following regarding Walgreens Boots Alliance, Inc. (NASDAQ:WBA) in its Q2 2024 investor letter:
“Alternatively, shares of retail drugstore operator, Walgreens Boots Alliance, Inc. (NASDAQ:WBA), underperformed following an earnings miss and significant reduction to full year guidance, largely due to continued weakness in its U.S. retail business. In response, management announced a multi-year plan for the U.S. business to reduce the retail footprint, invest in the customer experience, align the retail and healthcare businesses for enhanced go-to-market capabilities and simplify the healthcare portfolio.
Meanwhile, the company continues to execute on its cost savings initiatives to optimize profitability and is using excess capital to prioritize the sustainability of its operations and balance sheet. Over the medium-term, we expect a re-rating in shares as WBA’s new CEO rebuilds the leadership team and earns credibility by executing on previously articulated strategic imperatives as well as margin.”
