If you’re a value-oriented investor, there are a couple of stocks that have been battered in the market that you should take note of now. These stocks may not be the most secure investments due to some uncertainty surrounding their future prospects. However, they are currently trading at significantly reduced prices, and they are well-established in their respective industries.
The companies I’m referring to are Walgreens Boots Alliance (NASDAQ: WBA) and iRobot (NASDAQ: IRBT). While these may not be the most conservative choices for risk-averse investors, here’s why you should consider them if you are patient and can tolerate some risk.
1. Walgreens Boots Alliance
Walgreens Boots Alliance possesses valuable assets, particularly its well-known brand. When people think of Walgreens, they typically associate it with their local pharmacy. This brand recognition sets it apart and may attract consumers to choose their neighborhood Walgreens over a large retailer like Walmart.
One of the challenges facing Walgreens is its profitability struggles. The company reduced its dividend this year and is currently engaged in a significant restructuring initiative, including the launch of 1,000 primary care clinics by 2027. It has joined forces with primary care provider VillageMD to execute this plan.
Although this turnaround strategy is risky, the appointment of the new CEO, Tim Wentworth, adds an element of intrigue to the investment. Wentworth assumed the role in October and swiftly cut the dividend in January, demonstrating a proactive approach that was evident to many investors.
The dividend cut was necessary to support the company’s long-term healthcare strategy. Consequently, I would caution against relying on the dividend as it may not be sustainable, even at a reduced level.
The appeal of investing in Walgreens lies in its deeply discounted stock price, reminiscent of levels not seen since the ’90s. This could present a rare buying opportunity that comes along once in a generation. However, success hinges on favorable outcomes and Wentworth’s ability to execute the turnaround effectively.
Many companies falter in such circumstances, as evidenced by the bankruptcy of Rite Aid. This underlines the risks involved…
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