WMT - Wal-Mart Stores Inc

Wal-Mart Stores, Inc. operates retail stores in various formats worldwide. The company’s Walmart U.S. segment offers meat, produce, deli, bakery, dairy, frozen foods, floral, and dry grocery; health and beauty aids, household chemicals, paper goods, and pet supplies; electronics, cameras and supplies, photo processing services, cellular phones, cellular service plan contracts, and prepaid service and toys; fabrics and crafts, stationery and books, automotive accessories, hardware and paint, horticulture and accessories, sporting goods, outdoor entertaining, and seasonal merchandise; apparel, shoes, and jewelry; pharmacy and optical services; and home furnishings, housewares, and small appliances through discount stores, supercenters, and neighborhood markets, as well as through walmart.com. Its International segment includes various formats of retail stores and restaurants, including combination discount and grocery stores, supercenters, Sam’s Clubs, hypermarkets, cash-n-carry stores, department stores, and general merchandise stores. The company’s Sam’s Club segment offers merchandise, including hardgoods, softgoods, institutional-size grocery items, and selected private-label items under the MEMBER’S MARK, BAKERS & CHEFS, and SAM’S CLUB brands through warehouse membership clubs in the United States, as well as through samsclub.com. As of January 31, 2009, it operated 891 discount stores, 2,612 super centers, 153 Neighborhood Markets, and 602 Sam’s Clubs in the United States; and 28 units in Argentina, 345 in Brazil, 318 in Canada, 197 in Chile, 164 in Costa Rica, 77 in El Salvador, 160 in Guatemala, 50 in Honduras, 371 in Japan, 1,197 in Mexico, 51 in Nicaragua, 56 in Puerto Rico, and 358 in the United Kingdom, as well as 243 stores through a of joint ventures. The company was founded in 1945 and is based in Bentonville, Arkansas.

Wal-Mart Stores Inc.
702 SW Eighth Street
Bentonville, AR 72716-0215
United States - Map
Phone: 479-273-4000
Fax: 479-273-4053
Web Site: http://www.walmartstores.com

Retail Sector Play: Wal-Mart

The Retail sector is showing considerable strength. Our position in RTH (Retail Holders) index has been performing well.


We took a more concentrated position in Retail by investing in SHOO in which we made a 7% gain in a week. Next, we took a position in Gap. Unfortunately, we lost 1% in that position as more serious problems with the Gap came to light.

Our next play in the Retail sector is Wal-Mart.


$4 Prescription Drugs Coming to a Wal-Mart Near You!

If you have not heard about the buzz with Wal-Mart, be prepared to be amazed. Wal-Mart is rolling out $4 generic prescription drugs in 12 more states including Michigan and Ohio as of Thursday, sooner than originally planned, bringing the program to nearly two-thirds of its U.S. stores.

The $4 generic program covers a 30-day supply of 143 different drug compounds that represent about 25 percent of generic prescriptions dispensed in Wal-Mart pharmacies.

Wal-Mart said that in the first four days after the program was expanded to 14 new states last week, it filled more than 152,000 new prescriptions.

Wal-Mart is not making money with this generic prescription drug program. Instead, they are going for viral sales in which the prescription drug counter is located in the back of their stores. The idea is to create greater traffic through the store, and hence greater sales, as customers seeking to capitalize on the cheapest generic drugs on the market are slammed with advertisements and sale signs as they pass through the bulk of the store.

Wal-Mart Brings Costs Down

In an October 24th article, the AP writes:
"The retailer's plans to throttle back on spending and expansion contrast with the aggressive growth strategy of recent years.

Analysts were generally supportive of Wal-Mart's moves, aimed at restoring sales and earnings growth and boosted its stagnant stock.

"Management's capital expenditures guidance was even better than our expectation," Goldman Sachs analyst Adrianne Shapira wrote in a client note. "In our opinion, management's focus on 'returns-based growth' should help drive multiple expansion."

Bear Stearns also said Wal-Mart's decision to curb square footage growth was positive. "More specifically, we are encouraged by management's new capital allocation mindset, which aims to improve capital efficiency," analyst Christine Augustine wrote.

Bank of America said slowing square-footage growth would raise free cash flow, which in turn makes more likely a higher dividend payout or increased share buybacks, both of which Wal-Mart has not done in more than a year, analyst David Strasser wrote. A lower rate of expansion will also improve same-store sales -- sales in stores open at least one year -- Strasser added."

Wal-Mart and China

In an October 24th article by Marcus Kabel, Associated Press Writer, Mr. Kabel explains the Wal-Mart and China connection:
"Wal-Mart's top international executive said Tuesday that the world's largest retailer wants to tackle China the way its founder, Sam Walton, did in the United States -- by offering a slew of items at a resonable price.

"You have to be excited by China. That's where Wal-Mart can win," Mike Duke, chief executive of Wal-Mart Stores Inc.'s international division, said at a meeting with Wall Street analysts.

Duke was responding to questions about reports that Wal-Mart Stores Inc. wants to expand in China by offering about $1 billion for a chain of 100 combination merchandise and grocery stores, or hypermarkets.

News reports citing unnamed sources have said Wal-Mart is bidding for the hypermarkets from Taiwanese company Trust-Mart."

Wal-Mart Seeks to Improve Image

In a Reuters article by Emily Kaiser published on October 24th, Emily writes:
"When Wal-Mart Stores Inc. (WMT.N: Quote, Profile, Research) executives meet with politicians in Washington these days, the discussion no longer centers on wages and benefits, or how the retailer pressures suppliers and competitors.

"Our conversation now begins on things like $4 generics," Leslie Dach, Wal-Mart's head of corporate affairs and government relations, said Tuesday at an analysts meeting in Teaneck, New Jersey, referring to the list of 143 cut-price generic drugs that Wal-Mart is selling in 15 U.S. states.

"The conversation begins on things like jobs and opportunity zones ... Can you do for my city what you were able to do for Chicago?" where Wal-Mart recently opened its first store, Dach said."

Wal-Mart's New Ad Agency

In an article written by Paul Thomasch of Reuters, Mr. Thomasch explains Wal-Mart's new ad agency:

"Wal-Mart Stores Inc. has awarded its $578 million advertising work to agencies owned by Interpublic Group of Cos Inc. and Aegis Group.

Wal-Mart decided put its ad accounts up for review as part of its move toward a more polished image, which included adding more upscale items such as flat-panel televisions and trendy clothing. The retailer, for instance, recently signed on as sponsor of ESPN's Monday Night Football to promote its high-definition TVs.

Seasonality

4th quarter sales at Wal-Mart from the Christmas season should be good this year according to Retail analysts. This positive forecast for Retail this holiday season is due, in no small part, to lower unleaded gas prices consumers pay at the pump.

Intense Secret Negotiations Ongoing Between Wal-Mart and China

"Wal-Mart reports weakest monthly sales in years

SAN FRANCISCO (MarketWatch) -- Despite an upbeat forecast for October, Wal-Mart Stores Inc. notched the slowest gain in same-store sales in years, the retail giant reported Saturday. WMT said sales at established U.S. stores rose an estimated 0.5%, far off the 2-to-4% gain the company originally forecast for October."

This is an excellent time to buy WMT on the/if it comes, dip. The key aspect to note here is that in the write up I did on this company in the post above, you'll notice that analysts not only already knew about the weak monthly sales gains, but that Wal Mart has already announced ways in which they are going to improve that number which includes: slower rate of expansion, and less re-modeling.

The section I posted above that is pertinent reads:
"In an October 24th article, the AP writes:
"The retailer's plans to throttle back on spending and expansion contrast with the aggressive growth strategy of recent years.

Analysts were generally supportive of Wal-Mart's moves, aimed at restoring sales and earnings growth and boosted its stagnant stock.

"Management's capital expenditures guidance was even better than our expectation," Goldman Sachs analyst Adrianne Shapira wrote in a client note. "In our opinion, management's focus on 'returns-based growth' should help drive multiple expansion."

Bear Stearns also said Wal-Mart's decision to curb square footage growth was positive. "More specifically, we are encouraged by management's new capital allocation mindset, which aims to improve capital efficiency," analyst Christine Augustine wrote.

Bank of America said slowing square-footage growth would raise free cash flow, which in turn makes more likely a higher dividend payout or increased share buybacks, both of which Wal-Mart has not done in more than a year, analyst David Strasser wrote. A lower rate of expansion will also improve same-store sales -- sales in stores open at least one year -- Strasser added."

So this is not really a surprise. But nevertheless, it may be good enough news to allow us to add to our position on a pullback, if one materializes.

As long as analysts continue to remain upbeat, Institutional money will continue to flow into Wal Mart.

Also keep in mind that the release from the labor report showed wages rising fast. Interest rates have been kept the same by the Fed, and we have lower gas costs for consumers. This a beautiful and positive recipe for success in investing in the interest rate and gas sensitive consumer driven Retail sector.

For someone new thinking about investing in Wal Mart, this is excellent news. You are looking to take a position on a pullback.

Notice in the chart below, anything near or under $48 is an excellent opportunity to add to ones position or iniate a new position.

I remain upbeat and positive about Wal Mart's potential for future price appreciation, even in the face of the possibility we may experience a short term pullback.

MindoverMarkets in another thread, came out recommending a SHORT on my Wal-Mart play. In fact, the urgency of his message was entitled "Short WalMart NOW".

Today, he now recommends going LONG after Wal-Mart has been, and I quote, "beat up". Let's examine that erroneous "beat up" claim.

In the chart above, when we took a LONG position, the price was about $51.75, today, Wal Mart trades for $47.91. When MindoverMarkets recommended a SHORT from a news story over the weekend, the stock opened for trading at $49.22 the next trading day, Monday. Therefore, if someone would have SHORTed Wal-Mart at $49.22, and would cover that short today, the drop represents a 2.6% difference, and that does not count commissions. Further, it does not count "margin fees", for to SHORT one must borrow on margin. A 2.6% drop is not worthy by any stretch of the imagination as being the defining quantifying number of a stock that has been, and I quote, "beat up". In fact, figuring in commissions and margin fees, you would have about broken even SHORTing the stock when he said was a good time to do so.

What the flip-flop by MindoverMarkets (MOM) demonstrates is more of the personal dynamics of a message forum like this, as opposed to actually making money or helping others to make money. The evidence suggests that after a run-in between MOM and I in which I gave a rudimentary, but accurate quote: "Nip at my heels and you will ge kicked", and pointing out those who hide their true identity behind an alias are questionable characters to me (which is about 60% of everyone posting here), he could not help himself with the idea of gunning for one of my picks. It was just too tempting, with someone he dislikes, to axe grind by targeting my newest addition. Unfortunately, his dislike of myself blinded him to the idea that he may cause someone who actually followed his advice, to loose money. I'm hoping that most readers laughed, like I did, at the idea of SHORTing a bell-weather powerhouse like Wal Mart, based on a few PRs released over the weekend. Funny as well is the idea of only holding a SHORT that you originally, and so passionately, recommended by a sense of urgency with the title "SHORT NOW", and then to only hold the SHORT for 3 days.

In any event, the idea here is not to "roast" MOM, well.... ok, maybe a little The real importance here is the idea of the dynamics that occur between people, over a message forum. For the same dynamics that you see occur here, because they are by nature between people, are the same dynamics that occur on Wall Street. It is common for groups of investors or hedge funds to SHORT a stock based on "axe to grind" like logic such as to take out a competitor who is down.

The thing to take away is that there are often times "under-currents" beneath the surface that make investors react a certain way, that may not be so evident on the surface. The master investor looks for these under-currents, beneath the surface, and can play them to his advantage, or, as in this case, to know what advice is probably not good to follow.

Hi Jecka,

I'm gonna ignore further posts regarding the subject. I think I've said what needed to be said about the situation. I do pride myself on staying above the arguing and bickering as well as creating real quality posts of value and humor for others.

Short on time, but will respond to your comments on WMT a little later.

Glad you like some of the "cool ideas" and thanks for your kind words of support, they are much appreciated.

"I haven't been paying attention to WMT -- just not interested in the big-box retailers - but today, the summary of Oct sales for the apparel stocks came out with mixed/disappointing results...giving reason for pause."

Now I'm going to tell you something that may shock you. The Retail sector is doing just fine. Factoring out Wal-Mart, the results go from so so to very good. Excluding Wal-Mart, whose main stores saw very limited growth, the industry expanded at a 4.9% pace, and justifiably so. With unemployment dropping to an incredible 5 year low, and wages rising fast, along with the drop in Oil which translates into savings for Retail companies in shipping/production costs and greater consumption by consumers because of lower unleaded gas costs, the Retail sector should continue in the bullish uptrend that began months ago. Remember, you are looking into the past when you look at October sales. October sales were priced in to the market 3 - 9 months ago.

"I think many of us were thinking they'd soar in front of the holiday shopping season, but they're kind of biting us in the ass."

Remember, Mutual funds companies have their fiscal years at the end of October and try to take as many losses in October to balance their taxes. They then come back with strong investment in November.

Hang in there, throwing in the towel on the Retail sector as we enter into the second phase of a bull market (which is also the greatest market gains as well) is premature. It's important to not look at the past, but the future, or at least the present to better speculate on the future. What sort of things can you look at in the present and speculate into the future beyond $4 prescription drugs from Wal-Mart? Read on. Below are just a few news stories from the last few days.

Health of the Retail Sector

"The lines are already forming and it’s not even close to the Christmas season yet. But that didn’t stop shoppers in Doral Sunday evening who just couldn’t wait to get their hands on two of the season’s hottest toys." Source: http://cbs4.com/consumer/local_story_301230632.html

Analysts predict hot retail season

"Holiday shoppers plan to spend big bucks this year, flush with job security and a rosy outlook on the economy, according to recent consumer surveys.
The average consumer plans to spend $791.10 this holiday season, up from $738.11 in 2005, according a survey conducted by the National Retail Federation.

Shoppers will also take advantage of holiday sales and spend an additional $99.22 on themselves, according to the survey.

A separate consumer survey by Deloitte & Touche USA LLP also provides good news for retailers, with an expected 5 ½ to 6 percent increase in holiday spending compared to last year" Source: http://www.whittierdailynews.com/business/ci_4599375

Cramer: "In the last few days, retailers have been down because business wasn't good, he said. But now, perhaps these companies are done going down. I want to own them because it's going to be a good Christmas," Cramer said. "You have to own these stocks before Christmas." Source: http://www.thestreet.com/_tscrss/fun.../10319582.html

"Christmas tree wholesalers have begun cutting and shipping their orders, and early indications are that another green holiday season is looming. Linda Gragg, head of the Boone-based North Carolina Christmas Tree Association, said, “We expect an equal or better year this year.” Source: http://www.wataugademocrat.com/2006/...tlikexmas.php3

Stores aren't waiting to stock Christmas items, gifts

"According to the Associated Press, almost two-thirds of consumers plan to attend or host Halloween celebrations this year which is an increase from 52 percent last year. Consumers said they also plan to spend 22 percent more on Halloween items this year, or about $59 per person."[Stats show that the more that people are spending on Halloween, the more they will spend on Christmas].

Christmas charge begins
Retailers eager to get a jump on holidays

Early-bird shoppers will have the best chance of getting the must-have holiday gifts for Christmas 2006, particularly when toys like T.M.X. Elmo - the 10th anniversary edition of Tickle Me Elmo - are already in short supply.

Other popular gift items may soon join those missing-in-action Elmos. The most popular toys at Johnny's Toys in Latonia are Dora the Explorer, Marvel action figures, Strawberry Shortcake, Polly Pocket and Itsy Bitsy Spiderman.

"We have our order in for more Elmos. They sell as soon as we get them in," said Gary Timmerding, store manager of Johnny's Toys.

Retailers expect video game systems such as Play Station 3 and Nintendo Wii will be hot when they are released next month.

"People are going to camp out for those," said Steve Erskine, hardlines executive team leader at Target at the Center of Cincinnati in Oakley.

The trend bodes well for retailers counting on Christmas to boost revenues and profits.

Unlike last year, retailers are heading into the season hoping for solid sales - from a fall shopping season that was robust.

Stable gasoline prices and wage growth mean shoppers may be willing to spend more.

GASOLINE DOWN

Gasoline prices this year are not much of a worry for Jo Ann Puckett, a 25-year-old Union, Ky., resident. Prices have slid roughly 50 to 60 cents a gallon from the $2.74 a gallon last year at this time.

That means the Puckett family will have a bit more room under the tree, and it's a good thing. "My daughter (18 months) and son (6) are a little older, so they're going to want things that probably cost a little more," she said." Source: http://news.enquirer.com/apps/pbcs.d...IZ01/610300319

"SHORT sellers are cowards" is an important concept to understand. SHORT sellers are weak in their position. They are usually looking for a quick profit, and are sketish and fearful, prepared to run with their profits at any sign of their position going against them.

I am often a SHORT seller myself, it is a time in which I place the coward hat on my head. There are a few shorts in which I'm stubborn as a bull, but those are few.

Keep in mind that by definition, bears are more fickle than bulls and scare easier. That is why the analogy of bear and bull is used. Bulls tend to be stubborn. Bears tend to be fickle because they scare easy (and wouldn't you if you were SHORT a stock like Wal-Mart that is the world's largest retailer with over 1.8 million workers and with revenue last year of over 320 billion dollars with a quarterly yoy revenue growth of 11.30%?)

I don't believe many investors with serious money behind them would SHORT Wal-Mart going into the traditionally strong season for Retail. Nevertheless, I'm going to lay out a strategy on how to make any SHORT seller turn tail and run.

Keep in mind that I'm not advocating price manipulation which could run me into trouble with the SEC. This is for educational purposes only.

Below is the scariest chart imaginable to the fearful SHORT seller:



Notice that as the stock is rising, the volume moves up in a step ladder type pattern which suggests to the cowardly SHORT seller that a greater number of buyers are stepping in at each level.

If one has deep enough pockets and holds back investing their entire wad in one transaction, one can create such a step up pattern in the price and volume and thereby cause SHORT sellers to run in panic.

The way to do this is to set limit orders on your buys in increments of $0.15 - $0.25 cent intervals for Wal-Mart so that, for example, you have a limit order to purchase @ $47.25 10,000 shares, $47.40 15,000 shares, $47.55 20,000 shares, $47.70 25,000 shares. The idea is to walk the stock up, creating a minature pattern on the daily chart near it's low (preferably near a major support, a lower channel wall, or a 10, 20, 40, 50, or 200 day MA line) like the image I posted above. What's great is when you see that other big buyers are doing the same and so you match your limit orders to theres. It is not wise to post in a public message forum the price in which you want to do this at, at each level, as SHORT sellers can play off your limit orders.

@Amohedas,

Give Sean a heads up that he ought to apologize to Jecka in a private personal message. This was really bad in that it caused Jecka and my account to be froze. Fortunately I reacted quickly to following up the chain of command here to alert everyone of Sean's false statements and subsequent freeze on my account, and presumably Jecka's as well, and the freeze was removed in a prompt and professional manner.

You are correct in that this is "behind us" and I could personally care less if Sean sets the record straight with me by apologizing as I prefered to take action to take it out of his hide. As far as I'm concerned, Sean and I are squared from his "mishap". But I'm not Jecka, and if you see a person is having a little trouble moving to the this is "behind us" mentality, then maybe they really did get offended, and continue to be when other posters following in-line behind Sean's example, continue to make the same false accusation over and over again. The focal point here is not Jecka putting this "behind us", you need to talk to Sean and have him make things right concerning Jecka and that includes putting a stop to the continuing false accusations by others who are following in Sean's footsteps by continuing to make these accusations on an ongoing basis as evidenced by some of the above messages in this thread.

@Jecka,
I continue to apologize for this. My posts are intended to entertain "lurk" readers such as yourself which, according to the messages numbers, represent a vast group here at HSM. I completely understand why so many remain in "lurk" mode. The situation that happened to you just serves to reinforce the downside with setting up an account and going beyond just anonymously reading messages. Here you are entertained by a few of my messages, come out of "lurking" to say something supportive to me, and POW, you are attacked, your account presumably froze along with mine for being accused of being an "alias" of mine, and now repeatedly accused of being an alias of mine. This is precisely why there will always be a very large "lurk" group here at HSM, a group I try my best to entertain and appeal to.

It's sort of funny to in that I am one of the few who does not use an alias name, for why would anyone trust someone with their money and investment decisions, who wasn't even willing to use their real name? A sort of like, you should trust reading what I have to say and trust me with your hard earned money, uhh... but I don't trust you enough to give you my real name? Now imagine Charles Schwab trying to get away with that. So that these same people who use anonymous handles to hide their identities are the same ones who rush to accuse me of setting up multiple aliases? This is clearly a case of "self projection" in which these people are projecting actions they themselves have considered, or actually done, in the past, unto someone else. I am probably the one person posting in this message forum that would be the least likely person to do such a thing as I don't even use a single alias like 100% of the people who are accusing me. That just cracks me up and is hilarious! I did up some funny cartoons and illustrations demonstrating what I just described above but will not post them on the Internet or in this message forum out of respect for HSM rules, but instead will use them for my other, non-Internet business and research into the psychologically harmful (and self esteem lowering) use of so called anonymous alias names.

I've coined research into how alias names actually change a persons behavior when they feel a degree of anonymity, and also how having an alias actually contributes to the behavior of posting of messages that violate HSM's forum rules. It's some pretty good stuff with deep psychology, and actually is a defense for those who get arrested due to pornography on their computers. The idea on one hand that you have the Government saying: "YOU ARE NOT ANONYMOUS IN CYBERSPACE, AND YOU WILL BE HELD ACCOUNTABLE FOR YOUR ACTIONS" versus logic based on my research saying: "THE ONLY REASON YOU DID THE CRIME IN THE FIRST PLACE WAS BECAUSE YOU FELT ANONYMOUS". That is to say the government views the use of anonymous handles is to hide a crime, or to hide the true law breaker that you really are. Whereas my view is that the action you did is not indicative of who you really are, that the only reason you did the crime was because of the anonymous handle and the psychological state of anonymity you felt. I go on with a case study to prove the negative psychological impact alias handles have by conducting a study of violent protests between anti-abortion and pro-abortion rallies. In each case, when the protesters were not required to file their names with the local police department, and were allowed to wear masks covering their face, violent conflict and physical attacks broke out.

...anyways while some may find this conversation fascinating like myself, others will no doubt use it to attack the "long rambling" nature of my posts.

Suffice to say guys, I can sum up everything in one sentence, here is the super duper important and deep insight into all of this and everything:

GO CHECK OUT MY NEW HOT LANCEJ'S HSM PORTFOLIO PICK GME AND LOOSEN UP A LITTLE AND LAUGH AT THE ILLUSTRATION OF CRAMER!