In The Cabot Benjamin Graham Value Letter -- which assesses stocks based on Graham's value investing critera, editor J. Royden Ward takes a look at Wal-Mart Stores (NYSE: WMT).
"In this month's Classic Benjamin Graham Value Model, our calculation suggests that the Dow is overvalued at 12,370 and undervalued at 8,305; as such, today the market is extremely undervalued.
"This low-risk environment means it's probably a great time to add risk by dabbling in our recommended stocks such as Wal-Mart Stores.
"How cheap is it? The recent decline in WMT shares has created an outstanding buying opportunity for investors. WMT shares now sell at only 12.3 times forward EPS with a dividend yield of 2.0%.
"Wal-Mart's low price offerings have enabled the company to weather recessions better than most retailers. We expect WMT shares to advance to our Minimum Sell Price of 65.64 within two to three years.
"Wal-Mart is the world's largest retailer with $400 billion in sales in 2008 and more than 7,000 stores around the globe. The company is cutting its new store expansion plans in the U.S. in favor of expanding and renovating existing stores.
"Wal-Mart has been able to gain market share from department stores by offering low prices, which are a big attraction during the current slowdown in the U.S. economy. Higher sales of food, pharmacy, and lower-priced private label items are helping to boost current sales growth."
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Reader Comments (Page 1 of 1)
2-27-2009 @ 3:31PM
pwang912 said...
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2-27-2009 @ 9:47PM
roudy11z said...
Wal-Mart has been and always will be a value stock to me. Since 1981 how could I be wrong. I have done well and do not plan to sell any time soon.RoudMan