Wal-Mart Stores (NYSE: WMT) is
the world's largest retailer, offering a vast array of general merchandise through some 7,350 stores. That total includes nearly 1,000 discount stores, over 2,800 combination discount and grocery stores and about 600 warehouse outlets. More than half of Wal-Mart's stores are in the United States, but the firm has a widespread and growing international presence. It is the biggest retailer in Canada and Mexico, has a 95% stake in Japan's Seiyu and has developing operations in Europe, South America and Asia. The company employs more than two million associates and serves more than 200 million customers per year. Target (NYSE: TGT) and Costco Wholesale (NASDAQ: COST) are major competitors.
The stock has been a steady gainer of late, advancing on word of better than expected Q2 results, solid expectations for Q3/FY09, decent same-store sales figures, international development, and generally favorable analyst commentary.
The news
has kept WMT shares cycling through a positive nine-week trading channel. The price is currently consolidating at the base of that channel, where an oversold Momentum technical parameter suggests the potential for a rise back toward the top. Correspondence of the stock's 90-day moving average to the base of the channel backs the rebound notion.
Brokers recommend the issue with eight "strong buys", nine "buys", five "holds" and one "underperform". Analysts expect a 12% average annual growth rate, through the next five years. The WMT Price to Sales ratio (0.60), Price to Cash Flow ratio (11.70), EPS Growth rate (19.44%), Return on Assets (8.37%), Return on Investment (13.31%) and Return on Equity (21.24%) compare favorably with industry, sector and S&P 500 averages. Institutions hold about 40% of the outstanding shares. The stock is one of those used to calculate the Dow Jones Industrial Average, the Dow Jones Composite, the S&P 500 Index and the S&P 100 Index. Over the past 52 weeks, it has traded between $42.09 and $61.00. A stop-loss of $52.40 looks good here.
Larry Schutts is a contributing editor for Theflyonthewall.com and the Vice-President of Stockwinners.com. He does not hold positions in any of the stocks mentioned above.
Reader Comments (Page 1 of 1)
8-22-2008 @ 1:16PM
Roudy said...
Larry has affirmed what us Wal-Mart fans have been saying through all the negative articles written over the past year about them. It did not compute at all that Wal-Mart would not do well through thick and thin. I realize they are not perfect but they certainly are a cut above the rest in my opinion. I have thought this since I bought the stock in 1981. I will stay the course.
RoudMan
8-22-2008 @ 2:51PM
BILLY BOB said...
i too own wal mart. this recession we are in now has helped move the stock a little. its been stagnant for too long.
8-22-2008 @ 9:03PM
Shaun said...
I just sold a bull put spread on Wal-Mart about a week ago. I believe the stock can increase, or at least not go down.
http://www.stocks-simplified.com