Wal-Mart keeps on Truckin'
Wal-Mart Stores, Inc. (WMT) is the world's largest retailer. They are engaged in the operation of mass merchandising stores, which serve their customers primarily through the operation of three segments, which are the Wal-Mart Stores segment, the SAM'S Club segment and the International segment.
The company just seems to have world domination as their goal and just might accomplish that. They are adding higher priced items to boost the sales figures. They are going after the "Dollar Store" market by opening more of their smaller stores around the US. Since price is the key they have a plan to eliminate as many of the middle men as possible and buy directly from the manufacturers. Eliminating the spread taken by the middleman should fall to the bottom line.
I noticed the recent price momentum and Barchart has a 100% technical buy signal. The price is up 2.74% this month and the Relative Strength Index is 62.36% and rising. The stock recently traded around 54.73 which is 3.68% above its 50 Day Moving Average.
Wall Street brokerages all recommend the stock as a core position and have published 23 buy and 7 hold report for their clients with no negative recommendations. They predict a 3.90% increase in sales this year and 5.00% next year. The savings I discussed above are expected to fall to the bottom line with an increase in earnings per share of 9.80% this year, 9.50% next year and continue for an annual compounded increase of 10.11% for the next 5 years.
If you are looking for a company that has a wide and positive general investor following this is it. The CAPS members over on Motley Fool vote 5,843 to 748 that the stock will beat the market and the All Stars agree with a vote of 1,394 to 110.
Fool notes that all 33 of the last articles written by Wall Street columnists have been positive.
Wal-Mart deserves attention as a core position because:
1 - Wall Street brokerages predict double digit earnings growth for at least 5 years
2 - Barchart has a 100% technical buy signal
3 - The stock is widely held and continues to have favorable press
Jim Van Meerten is an advisor to Marketocracy Capital Management who uses his model portfolios not only to manage their mutual funds but also their clients Separately Managed Accounts. You can read his blogs about those model portfolios and investing here and on Barchart Portfolio Blogs. Please leave a comment below or email JimVanMeerten@gmail.com.
Disclosure: Jim Van Meerten through Marketocracy Capital Management has an interest in the stocks mentioned in this blog.