Wal-Mart pulls back on buybacks

Wal-Mart Stores Inc. (NYSE: WMT) has put a halt to its share buybacks for the time being, citing a desire to take a conservative approach to working capital in light of the weak economy.

CFO Tom Schoewe told investors in October that the company was taking a "step back" from share buybacks: "It's not that we don't have confidence in our stock, and in fact I like the value today, better today, than I did a month ago, but we just thought to be consistent, to be conservative ... we did step back."

Wal-Mart's stock has performed exceptionally well this year as consumers look to save money by heading to the big box store. The stock is up about 19% since the beginning of the year compared with declines in the 35% range for the broader market.

Given that the stock hasn't been beaten down, it probably makes sense for Wal-Mart to conserve its cash to take advantage of opportunities created by the struggles of its competitors.

Mad props to Wal-Mart's board of directors and management for resisting the urge to pump up the stock with buybacks that aren't necessarily in the best long-term interests of the company and its shareholders.