Walgreens Boots Alliance (WBA) acknowledged disappointing quarterly results on Thursday, cutting its full-year financial guidance to a range of $2.80 a share to $2.95 a share, down from previous expectations of $3.20 a share to $3.35, and well off analyst estimates of $3.21. CEO Tim Wentworth discussed plans that could lead to the closure of thousands of its U.S. pharmacies as the company’s retail business continues to struggle. “We are at a point where the current pharmacy model is not sustainable, and the challenges in our operating environment require we approach the market differently,” Wentworth said, also noting that a quarter of the stores are not contributing to operating income. While there were positives – a well-performing international business and a growing U.S. healthcare segment for instance – future performance will heavily rely on the company’s shift toward greater efficiency.
Friday, June 28, 2024, Subscribers-Only Podcast:
Covering recent news and analysis for our portfolio companies and other topics relevant to value/contrarian investors.
Today’s podcast is about 5 minutes long and covers:
- Initial note
- Introduction and setup for next CTL issue.
- Comments on recommended companies
- Mattel (MAT) announced that 80% of its global games portfolio will be colorblind accessible by the end of the year, and 90% in 2025, as part of its commitment to create more inclusive play experiences.
- Western Union (WU) launched its first “concept store” in Morocco, in collaboration with Cash Plus. This is the first Western Union concept store to open in Africa and marks a significant milestone in the company’s “Evolve 2025” strategy for the country and the continent.
- U.S. Steel (X) addressed concerns brought by an activist shareholder of potential acquirer Nippon Steel saying the takeover would increase decarbonization costs. The company is in the process of ramping up recycling facility Big River Steel which will replace a portion of traditional, carbon-intensive blast furnace capacity.
- Foot Locker (FL) unveiled an enhanced FLX Rewards program and announced forthcoming upgrades to its mobile app, marking significant milestones under its Lace Up Plan – the Company’s strategy designed to drive sustainable and profitable growth.
- Volkswagen (VWAGY) announced a joint venture with EV truck manufacturer Rivian (RIVN), providing them with a cash injection of $5 billion to create new proprietary technologies for future EV releases.
Please know that while I don’t yet personally own shares of all Cabot Turnaround Letter recommended stocks – including the stocks mentioned in this note – that will materially change over time.
Please feel free to share your ideas and suggestions for the podcast and the letter with an email to either me at mwarder@cabotwealth.com or to our friendly customer support team at support@cabotwealth.com. Due to the time and space limits, we may not be able to cover every topic, but we will work to cover as much as possible or respond by email.
Portfolio
| Market Cap | Recommendation | Symbol | Rec. Issue | Price at Rec. | Current Price * | Current Yield | Rating and Price Target |
| Small cap | Gannett Company | GCI | Aug 2017 | 9.22 | $ 4.60 | - | Buy (9) |
| Small cap | Duluth Holdings | DLTH | Feb 2020 | 8.68 | $ 3.78 | - | Buy (20) |
| Small cap | Dril-Quip | DRQ | May 2021 | 28.28 | $ 18.51 | - | Buy (44) |
| Small cap | Kopin Corp | KOPN | Aug 2023 | 2.03 | $ 0.83 | - | Buy (5) |
| Small cap | Ammo, Inc. | POWW | Oct 2023 | 1.99 | $ 1.66 | - | Buy (3.50) |
| Mid cap | Mattel | MAT | May 2015 | 28.43 | $ 16.21 | - | Buy (38) |
| Mid cap | Adient plc | ADNT | Oct 2018 | 39.77 | $ 24.68 | - | Buy (55) |
| Mid cap | Xerox Holdings | XRX | Dec 2020 | 21.91 | $ 11.56 | 8.6% | Buy (33) |
| Mid cap | Viatris | VTRS | Feb 2021 | 17.43 | $ 10.65 | 4.5% | Buy (26) |
| Mid cap | TreeHouse Foods | THS | Oct 2021 | 39.43 | $ 36.27 | - | Buy (60) |
| Mid cap | The Western Union Co. | WU | Dec 2021 | 16.40 | $ 12.16 | 7.7% | Buy (25) |
| Mid cap | Brookfield Reinsurance | BNRE | Jan 2022 | 61.32 | $ 41.55 | 0.8% | Buy (93) |
| Mid cap | Polaris | PII | Feb 2022 | 105.78 | $ 77.29 | 3.4% | Buy (160) |
| Mid cap | Goodyear Tire & Rubber | GT | Mar 2022 | 16.01 | $ 11.38 | - | Buy (24.50) |
| Mid cap | Janus Henderson Group | JHG | Jun 2022 | 27.17 | $ 33.59 | 4.6% | Buy (67) |
| Mid cap | Six Flags Entertainment | SIX | Dec 2022 | 22.60 | $ 33.18 | - | Buy (35) |
| Mid cap | Kohl’s Corporation | KSS | Mar 2023 | 32.43 | $ 22.66 | 8.8% | Buy (50) |
| Mid cap | Frontier Group Holdings | ULCC | Apr 2023 | 9.49 | $ 4.84 | - | Buy (15) |
| Mid cap | Advance Auto Parts | AAP | Sep 2023 | 64.08 | $ 62.08 | 1.6% | Buy (98) |
| Mid cap | Mohawk Industries | MHK | Jan 2024 | 103.11 | $ 112.47 | - | Buy (165) |
| Mid cap | VF Corporation | VFC | Mar 2024 | 16.24 | $ 13.41 | 2.7% | Buy (25) |
| Mid cap | Barnes Group | B | Apr 2024 | 36.55 | $ 41.33 | 1.6% | Buy (55) |
| Mid cap | First Quantum Minerals | FM | Apr 2024 | 15.93 | $ 17.43 | 1.6% | Buy (40) |
| Mid cap | United States Steel | X | Jun 2024 | 37.12 | $ 37.65 | 0.5% | Buy (55) |
| Mid cap | Foot Locker | FL | Jul 2024 | 26.56 | $ 24.60 | 0.0% | Buy (55) |
| Large cap | General Electric | GE | Jul 2007 | 304.96 | $ 158.38 | 0.2% | Buy (160) |
| Large cap | Nokia Corporation | NOK | Mar 2015 | 8.02 | $ 3.78 | 3.4% | Buy (12) |
| Large cap | Macy’s | M | Jul 2016 | 33.61 | $ 19.13 | 3.4% | Buy (25) |
| Large cap | Newell Brands | NWL | Jun 2018 | 24.78 | $ 6.31 | 3.4% | Buy (39) |
| Large cap | Vodafone Group plc | VOD | Dec 2018 | 21.24 | $ 8.85 | 11.5% | Buy (32) |
| Large cap | Berkshire Hathaway | BRK.B | Apr 2020 | 183.18 | $ 407.20 | - | HOLD |
| Large cap | Wells Fargo & Company | WFC | Jun 2020 | 27.22 | $ 59.03 | 2.4% | HOLD (64) |
| Large cap | Western Digital Corporation | WDC | Oct 2020 | 38.47 | $ 76.25 | - | HOLD (78) |
| Large cap | Elanco Animal Health | ELAN | Apr 2021 | 27.85 | $ 14.63 | - | Buy (44) |
| Large cap | Walgreens Boots Alliance | WBA | Aug 2021 | 46.53 | $ 12.12 | 8.3% | Buy (70) |
| Large cap | Volkswagen AG | VWAGY | Aug 2022 | 19.76 | $ 11.97 | 7.7% | Buy (70) |
| Large cap | Warner Bros Discovery | WBD | Sep 2022 | 13.13 | $ 7.43 | - | Buy (20) |
| Large cap | Capital One Financial | COF | Nov 2022 | 96.25 | $ 137.51 | 1.7% | HOLD (150) |
| Large cap | Bayer AG | BAYRY | Feb 2023 | 15.41 | $ 7.02 | 7.7% | Buy (24) |
| Large cap | Tyson Foods | TSN | Jun 2023 | 52.01 | $ 57.01 | 3.4% | Buy (78) |
| Large cap | Agnico Eagle Mines | AEM | Nov 2023 | 49.80 | $ 65.10 | 2.3% | Buy (75) |
| Large cap | Fidelity Natl Info Services | FIS | Dec 2023 | 55.50 | $ 74.95 | 2.7% | Buy (85) |
| Large cap | Baxter International | BAX | Feb 2024 | 38.79 | $ 33.15 | 3.3% | Buy (60) |
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