Is Walgreens Boots Alliance (WBA) A Smart-Long Term Buy?

Ariel Investments, an investment management firm, published its fourth-quarter 2020 ‘Ariel Fund’, ‘Ariel Appreciation Fund’, ‘Ariel Focus Fund’, ‘Ariel International Fund’, and ‘Ariel Global Fund’ Investor Letter – a copy of which can be downloaded here. In the fourth quarter of 2020, a return of 31.56% was recorded by Ariel fund, 23.57% by Ariel Appreciation Fund, 21.62% by Ariel Focus Fund, 8.26% by Ariel International Fund, and 9.80% return by Ariel Global Fund. You can view the fund’s top 5 holdings to have a peek at their top bets for 2021.

Ariel Investments, in their Q4 2020 investor letter, mentioned Walgreens Boots Alliance, Inc. (NASDAQ: WBA) and emphasized their views on the company. Walgreens Boots Alliance, Inc. is an Illinois-based retail company that offers and compiles the best known brands in healthcare, retail and beauty. It currently has a $42 billion market capitalization. Since the beginning of the year, WBA delivered a decent 21.84% return, while its 12-month gains are still down by -1.16%. As of March 8, 2021, the stock closed at $48.48 per share.

Here is what Ariel Investments has to say about Walgreens Boots Alliance, Inc. in their Q4 2020 investor letter:

“Walgreens Boots Alliance, Inc. has been essentially flat during our brief holding period. We have successfully owned Walgreens in the past. Recently, its share price has been pressured on concerns that Amazon may enter the prescription drug distribution business. As recently as 2015, Walgreens was a market favorite, trading at more than 20 times forward earnings. The company was expected to grow in good times and bad. Walgreens’ new clinics, designed to treat day-to-day healthcare needs such as flu shots and children’s ear infections, could be part of the solution for expensive emergency room overcrowding. Finally, trends toward generic pharmaceutics that began in 2015 are still considered a positive, as pharmacies have more influence in directing customers toward particular generics than with a patient seeking a patented drug prescribed by a doctor. Walgreens will face new competition going forward, but with its current depressed valuation, we believe the threats are more than discounted in an attractive stock price.”

Walgreens Boots Alliance WBA Pharmacy

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Our calculations show that Walgreens Boots Alliance, Inc. (NASDAQ: WBA) does not belong in our list of the 30 Most Popular Stocks Among Hedge Funds. As of the end of the fourth quarter of 2020, Walgreens Boots Alliance, Inc. was in 36 hedge fund portfolios, compared to 33 funds in the third quarter. WBA delivered a 15.69% return in the past 3 months.

The top 10 stocks among hedge funds returned 231.2% between 2015 and 2020, and outperformed the S&P 500 Index ETFs by more than 126 percentage points. We know it sounds unbelievable. You have been dismissing our articles about top hedge fund stocks mostly because you were fed biased information by other media outlets about hedge funds’ poor performance. You could have doubled the size of your nest egg by investing in the top hedge fund stocks instead of dumb S&P 500 ETFs. Here you can watch our video about the top 5 hedge fund stocks right now. All of these stocks had positive returns in 2020.

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Disclosure: None. This article is originally published at Insider Monkey.