Walgreens Boots Alliance, Alaska Air, and RH: Top Mid-Cap Gainers Last Week - Should You Follow Suit?

Last week, from December 9 to 13, Walgreens Boots Alliance (WBA), Alaska Air (ALK), and RH (RH) emerged as top mid-cap gainers, with respective gains of 15%, 14%, and 12%. These impressive performances have investors wondering if these stocks are worth adding to their portfolios. Let's delve into the reasons behind their gains and assess their valuations and fundamentals to help you make an informed decision.

Walgreens Boots Alliance (WBA)

Walgreens Boots Alliance surged 15% last week, driven by its strategic partnership with Kroger. This collaboration will expand WBA's reach and customer base, allowing it to leverage Kroger's extensive network of stores and digital platforms. The partnership is expected to generate significant synergies and boost WBA's revenue and earnings.

WBA's forward P/E of 6.77 and P/S of 0.06 suggest it may be undervalued compared to the broader market. Its P/B of 0.86 also indicates potential undervaluation. However, investors should consider WBA's high debt levels and the competitive landscape in the retail pharmacy sector before making a decision.

Alaska Air (ALK)

Alaska Air gained 14% following its "Alaska Accelerate" plan, aiming to generate $1 billion in incremental profit by 2027. The plan focuses on leveraging the acquisition of Hawaiian Airlines and booming demand for premium travel. It includes launching new international routes from Seattle, such as nonstop flights to Tokyo and Seoul, and rolling out a premium credit card with industry-leading benefits.

ALK's forward P/E of 10.75 and P/S of 1.15 are slightly higher than the market average, but its P/B of 3.17 indicates potential overvaluation. Investors should consider ALK's strong growth prospects and the potential benefits of its strategic plan before investing.

RH (RH)

RH rose 12% on strong holiday sales and a positive outlook. The company's luxury furniture and home decor offerings continue to resonate with consumers, driving revenue growth and profitability. RH's forward P/E of 22.31, P/S of 4.23, and P/B of 10.57 suggest it may be overvalued compared to the broader market. However, investors should consider RH's strong brand and growth prospects before making a decision.



In conclusion, while WBA and ALK may be undervalued based on their P/E, P/S, and P/B ratios, RH appears to be overvalued. However, it's essential to consider other factors, such as growth prospects, debt levels, and market trends, before making investment decisions. As an investor, it's crucial to conduct thorough research and maintain a diversified portfolio to mitigate risks and capitalize on market opportunities.