Walgreens (WBA) - WARNING! - Failing to Grow Shareholder Value
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- Опубліковано 25 лип 2024
- A review of 10 years of Walgreens (WBA) financial data and Per Unit Economics. Failing to grow EBITDA but trading at a premium. This stock has a large downside risk. Let's dive into the number and find the true Cash Flow Value.
"Long ago, Ben Graham taught me that 'Price is what you pay; value is what you get.' Whether we're talking about socks or stocks, I like buying quality merchandise when it is marked down." - Warren Buffett
So, here’s what we’ll be looking at in this video:
00:00 Walgreens stock analysis
00:29 The 5 key attribute
01:56 Financial results
10:02 Free cash flow
14:05 Per unit build-up
16:48 WBA Forecast 2032
21:38 Should you invest in WBA? Final review
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All opinions expressed by Cameron Stewart at Rational Investing with Cameron Stewart, CFA or on Cashflowinvestingpro.com are solely Mr. Stewart’s opinions. You should not treat any opinion expressed by Mr. Stewart as a specific inducement to make a particular investment or follow a particular strategy, but only as an expression of his opinion. Mr. Stewart’s statements and opinions are subject to change without notice. Past performance is not indicative of future results. Mr. Stewart does not guarantees any specific outcome or profit. You should be aware of the real risk of loss in following any strategy or investment discussed on this show. Strategies or investments discussed may fluctuate in price or value. Investors may get back less than invested. Investments or strategies mentioned on this show may not be suitable for you. This material does not take into account your particular investment objectives, financial situation or needs and is not intended as recommendations appropriate for you. You must make an independent decision regarding investments or strategies mentioned on this show. Before acting on information on this show, you should consider whether it is suitable for your particular circumstances and strongly consider seeking advice from your own financial or investment adviser.
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Any chance we could do a revisit of this one after the recent fall?
Yeah
Great content! Tell me please why do we use EV, I mean debt included, while we know a company won't pay it down but rather keep it in a certain level?
Very interesting. I like the extreme clarity on what your stock picking criteria is. Many other analyst sites could benefit from bringing the same clarity.
I am seeing others rate this as a favorable buy, with a historically safe dividend (for income investors), but their investment strategy is not to beat the market.
Glad it was helpful!
Thanks for great information !
This was my prediction when I was an undergrad student analysing their 10k report in 2018 from 2012 to 2018. When I heard they were acquiring villageMD and CareCentrix this year, I was like LULZ bank loans, and debt will increase for 2023 for sure. They are seriously shooting themselves in the foot by purchasing businesses instead of lowering their debt and trying to increase their cash flow. Yeah, I am a DBA student now and work at walgreens as a cashier near their corporate district. I'm still rolling on the floor laughing.
Thanks! An update on WBA after 85% price discount would be awesome.
Would it be more reasonable to deduct only its interest bearing debt? It is hard to believe that it is worth only $10 a share although we can see a clear downwards trend in stock price and the competition will only get more intense in the future.
Where do you see this stock price in Jan after earnings?
HI Cameron, would be great if you could do a follow up video on TCNNF, I am really interested in your thoughts regarding thier upcoming prospects this year and the current valuation
The market is a wash with cheap weed and they are under pricing pressure. They manufacture and should come through but it will take time.
Thank you for the analysis. Could you review MPW?
Hi opinion on cabel one $cabo?
What would you say is the best way to measure a company's debt profile? Relative to their income or relative to their assets?
Two ways. 1. affordability, so you are looking for an interest coverage ratio or times interest earned. Basically, EBITDA / Interest Expense. You want a large numbers. 2. Total leverage Net Debt / EBITDA which as paying down principal over time. I don't look at Debt / Assets or Debt / Equity because these measures use book value for assets and equity which (in my opinion) don't always reflect the current value of such assets. So I prefer affordability measures over balance sheet measures. Hope this helps.
Absolutely agree with your analysis, which is too bad because I frequent the store and prefer it over CVS for personal use.
Can you do UWMC next thanks cameron
PayPal recent quarter has an outflow of 362ML in the Cashflow form operation section defined as "OTHER". You have any idea what is that?
Looking at the 10k for detail, it’s probably a transaction loss allowance in cash. An odd line, I’d have to read more for better info. I’d guess cash losses on investments not shown on the income statement, hopefully temporary
thanks
CVS is opting for a more sustainable vertical integration of sevices.
Fantastic video. I own WBA but already accepted it's probably the weakest holding I own. This video research has certainly helped me decide what to do with the holding.
Hi Cameron, I joined your service, and when it tries to confirm my identity , it fails to send the email code. It's been going on all week . FYI.
Is the code in your junk box? Any screen grabs are helpful and i'll send the to the tech team. email me at cashflowinvestingpro@gmail.com
code not in junk bok. please check on your end. you may have a bug in your software. @@CstewartCFA
Awesome!!! Thank you. I do hold a few shares of Walgreens and was already considering not investing anymore.
Glad it was helpful!
Cameron do you think JNJ deserves an updated video? With the consumer spin-off, lawsuits, etc
Maybe, i'll look into it.
Stock is at $11 today. Is it a buy now?
Great video! I sure hope its trading above 35$ 10 years from now.
Great as always. Could you analyze Diageo someday
I've looked at it before. I love the products but they pay soo much for acquisitions that the have tremendous goodwill.
How about now, when it is 20$. Starts to look like too beaten down stock.
Love your content!
Thank you for saying that.
They're definitely on a mission to change operations. In my town, the large legacy store, that was from acquisition, was recently closed down. A stones throw away a new Walgreens pharmacy opened, but it's basically a pharmacy counter, drive through, and a small small amount of shelf space for OTC stuff.
I can't figure out how I think it'll work out. As a potential investor, it sounds promising. As a consumer, I don't like the new store and have started using another (waaaaaaay cheaper) pharmacy. My wife still uses them, though, lives the drive through with our little kids. Paying for convenience I guess.
Thoughts on TSN I know you review a while ago but it be cool to hear your opinion. As far as I'm concerned is a buy
code does not go in the junk box , Have you checked your email to see if its just me, or if there may be a bug?
Hi. thanks. I'm looking into it. I'm still getting new sales so it's working, not sure if it's intermittently having issues.
I just watched your video on 3M you made two years back, can you please make updated video on 3M on currently valuation and litigation issues.
I second this
The litigation risk might punch through the sub to 3M itself and it's very hard to say how much that will cost.
Great analysis. WBA is pretty risky, but there are tons of other great opportunity I will scoop up happily during the next correction I expect around the middle of February.
🙄🙄🙄 you don’t know
My friend, thanks for the videos. Can you consider advanced auto parts. If we're heading into recession people will more often fix an older car than buy a new one. Thanks, have a good day.
Thanks
Yes I can. Great company.
Bad logic
Our rmain maneron Cameron spitting the cash flow facts once again, saving us from the clutches of hype beast finance youtubers.
Thanks for watching. I appreciate it.
Insurance reimbursement rates for medications has tanked. PBM's are killing off most Pharmacies
Agree with this analysis I am staying away from Walgreens they do not have the strong free cash flow and low debt needed to thrive in current economic conditions. Hoping you could discuss the concept of moats during your analysis as well. A company without a moat is susceptible to attack and destruction no matter what the free cash flow is.
Damnnn you incinerated Walgreens 🙈
Do BTI please or any other cigarette stocks you like better
Well, damn. I am going to sell this stock now.
Seems like Walgreens is "cheap" for a reason there!
Yeahh i knew it that's why i stay away from it .
K smart guy
Stock goes up : “guys buy buy buy”. Stock goes down: “guys sell sell sell” 😂😂😂
Stop
@@crohmer It's the nature of stock analyst. When stock goes up, they give favorable ratings. And when stock goes down, they tell people to sell sell sell.
This is a stupid conclusion my friend. They have very low debt. That debt is just the leases from the locations that now have to be "cataloged" as debt but it isnt.
that's a good point but they are not able to grow earnings enough for me.
@@CstewartCFA yes i agree. Its a dividend aritocrat suited more for prudent investors.
Ebitdt. Oooo boy.. don't listen to this guy
Hahahaha thanks