Investors were taken on the ride of their lives in 2020. The unprecedented uncertainty caused by the coronavirus disease 2019 (COVID-19) led to the benchmark S&P 500 losing over a third of its value in less than five weeks during the first quarter. Thankfully, long-term investors have been rewarded for their patience with a ferocious snapback rally since late March.

Though many brand-name companies and growth stocks have rocketed higher since the bear market low on March 23, not all stocks have been so lucky. Three companies in particular greatly underperformed their peers over the past year, but look ripe for a turnaround. If you're aiming to do some value picking in an otherwise pricey market, the following three turnaround stocks could make you a lot richer in 2021.

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Teva Pharmaceutical Industries

Brand-name and generic drug developer Teva Pharmaceutical Industries (NYSE: TEVA) seems to find its way onto this list far too often. That's not a good thing, but I believe this is the year that the company will move past its long list of issues.

In no particular order, Teva has dealt with a bribery settlement, the ballooning of its debt after overpaying for generic drugmaker Actavis, and a number of lawsuits. These lawsuits range from generic drug price-fixing to the company's role in the opioid crisis. As the icing on the cake, Teva completely suspended what was once a juicy dividend to conserve cash.

While these conditions aren't ideal, the company's turnaround specialist CEO, Kare Schultz, has made incredible headway in his three years at the helm. Schultz has worked to reduce the company's annual operating expenses by $3 billion, sold off non-core assets to reduce outstanding debt, and used Teva's robust annual cash flow to lower net debt from north of $34 billion to under $24 billion. At this rate, Teva is potentially on track to have less than $15 billion in net debt by the end of 2023. In short, the company has a lot more financial flexibility now.

Though Teva's lawsuits remain a gray cloud, I'm also confident that Schultz can broker a settlement that will involve free or reduced-price generics over a defined period of time, along with minimal cash penalty. Even with more than $2 billion in annual operating cash flow, Teva needs to hang onto its cash to ensure its financial flexibility, as well as service its existing debt. If Schultz can resolve one or more of these legal issues in 2021, Teva could double in value.

Investors simply aren't going to find a fundamentally cheaper drug stock anywhere.

Image source: Getty Images.

Kirkland Lake Gold

Next up is gold-mining stock Kirkland Lake Gold (NYSE: KL). Though Kirkland Lake doesn't have any operational or legal issues like Teva, it was a big disappointment last year. Despite the price of physical gold increasing by more than $400 an ounce, Kirkland Lake ended 2020 modestly lower. That doesn't make a lot of sense. That's why it fits the definition of a turnaround stock that can make you richer in 2021.

The first part of this story entails higher gold prices in 2021 and possibly beyond. The Federal Reserve has pledged to keep its federal funds rate at or near record lows for three more years. At the same time, investment-grade bond yields are near historic lows in many parts of the world. There simply aren't many avenues to find inflation-topping yields. This, along with a ballooning U.S. money supply, should make gold a sought-after store of value for years to come.

More specific to Kirkland Lake Gold, its mines are firing on all cylinders. This past week, the company announced that all three mines hit their highest quarterly production for the coronavirus-impacted year. The company, which boasts one of the lowest all-in sustaining costs among gold stocks, produced nearly 1.37 million ounces of gold.

It also happens to have the best balance sheet in the entire industry. It ended 2020 with $848 million in cash with no debt. Considering how many gold stocks overextended their balance sheets between 2009 and 2013, this is saying something. What's more, the company returned almost $848 million to shareholders last year by tripling its dividend and repurchasing 18.93 million shares of stock.

Kirkland Lake Gold is a cash flow machine perfectly suited to take advantage of a higher physical gold price.

Image source: Getty Images.

Walgreens Boots Alliance

A final turnaround stock with the potential to make investors richer in 2021 is pharmacy chain Walgreens Boots Alliance (NASDAQ: WBA).

Brick-and-mortar pharmacy chains were hit hard in 2020. Whereas most healthcare stocks are highly defensive and relatively immune to drug and device slowdowns during recessions, this hasn't been the case for pharmacy chains. The coronavirus pandemic slowed foot traffic into their stores and, in many instances, closed in-store clinics that are critical to driving local traffic and repeat business.

And if that wasn't enough, Amazon announced its intention to enter the online pharmacy space. Walgreens generates its juiciest margins from its pharmacy, so this news wasn't well-received by Wall Street.

However, Walgreens Boots Alliance hasn't been sitting on its laurels. It's been implementing a full-scale turnaround plan that's already begun paying dividends.

First of all, the company is reducing up to $2 billion in annual operating expenses by 2022. However, it's significantly increased spending on digitization. Creating a more seamless experience for shoppers and promoting online sales should lead to more repeat business and an uptick in the company's organic growth potential.

Second, Walgreens sold its pharmacy wholesale business to AmerisourceBergen for $6.5 billion in a cash-and-stock deal earlier this month. Though it's slightly dilutive to the company in 2021, this move will improve Walgreens' operating margins by placing more emphasis on its pharmacy operations.

Third, the company partnered with VillageMD to open between 600 and 700 full-service clinics at its stores. Whereas most of its peers offer limited-service clinics, Walgreens aims to break the mold by expanding treatment capabilities within its stores and creating a seamless transition to its pharmacy.

At less than 10 times forward earnings, Walgreens remains a bargain.

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John Mackey, CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool's board of directors. Sean Williams owns shares of Amazon, Teva Pharmaceutical Industries, and Walgreens Boots Alliance. The Motley Fool owns shares of and recommends Amazon and recommends the following options: long January 2022 $1920 calls on Amazon and short January 2022 $1940 calls on Amazon. The Motley Fool has a disclosure policy.