Wal-Mart Stores, Inc. (WMT)

rhdme (< 20) Submitted: 5/27/07 1:07 PM : Start Price: $46.13 WMT Score: 52.21

I have read several posts on the subject and here is my opinion, any one that wants to charm in, please do so. I agree with one of the last post, about WMT, increasing earnings, sales etc over the last decade and the share price has been flat. Right now it is trading at a p/e ratio of 15.8 with future p/e ratio based on "expected" future earnings it's p/e ratio would be 13.36. I think within two years (or sooner) it is very possible for WMT to be a $60 stock. If expected earnings come in for 2009 at $3.51, which is what the experts are predicting and we assume a p/e at around 17 (which is historically low for WMT) for this period, this would put the stock price at $59.57, now trading at $46.91 which would be a profit of $12.76 per share or 27.2% return over a two year period or 13.6% per year not including the current 1.88% dividend yield (which has been increasing every year since 1974) to ride along the way.





Another note is per my research the stock in the last 5 + years has not traded at a stock price with this low of a p/e ratio. Even if we look back at July of 2006, the stock went as low as $42.31 witch at that time, had a p/e ratio of 17.55 compared to the current p/e of 15.8.





The street bid the stock price up from $20 in January 1998 to $70.25 December 1999, and then by January 2000 it settled at $55. In my opinion it was probably not a $55 stock then (should have been much lower) and probably is not a $46.91 stock today (should be a lot higher). Also WB bought it at around $50 with an even higher p/e multiple. My thoughts on this are that his value was correct but timing was not. Even he has said in the past, when we buy a stock, we can’t predict when it will go up, only that it will it go up. Full disclosure, I do not own any of WMT, but I am considering it in a big way. Anyone else have any thoughts? Fool On.





RHDME





Follow up to my post labeled "WMT, Is It Time To Buy? I Think So!!!





The Price To Sales Ratio In 2005 was 1.25 (Stock was trading around $60) with a historic average of all companies until 2005, the historic average was .86 (implying the stock was over valued).





Now fast forward to present time, the 2007 (May 26, 2007) Price To Sale Ratio is currently .56, well bellow the historic average. Precisely 34.88% bellow the historic average (Signal A Time To Buy???, Dun no).





The more I dig into this stock, the more I like it, any other comments would be greatly appreciated, therefore my fellow fools, get to computer and do some research!!!!





Also, another note is that Target current's P/E Ratio is 18.25 well bellow WMT. If WMT trades at this P/E Ratio in 2009, the stock could very will be priced at ($3.51 2009 "expected earnings" X 18.25) = $65.057 per share, well above current price of $46.91.





RHDME, liking WMT more and more, but still has not bought. Fool On!!!!

Report this Post Replies: 0 | Reply