This Friday is a big day for Wal-Mart investors. The world's largest retailer holds its annual stockholders' meeting in Arkansas in the morning and follows in the afternoon with a three-hour analysts' session. Both will be webcast at www.walmart.com, so if there are any surprises, they'll be live and echo worldwide.
A couple of days before the gatherings, Wal-Mart (symbol WMT) announced that May sales would be at the low end of the expected range. That, plus the market's general tumble, dragged the share price down to $48 on Tuesday. The company attributed the disappointing sales to Mother's Day coming too early this year for workers who got paid on May 15 and, once again, to the high cost of gasoline. Yet April sales were strong, and Wal-Mart shares spent most of May climbing from $45 to $50, so the energy excuse is debatable. Besides, affluent shoppers who are more annoyed than harmed by $50 fill-ups could deem it worthwhile to save a few bucks on this and that at Wal-Mart rather than pay more at a standard supermarket. And that no longer means slumming. Newer Wal-Mart Supercenters, which sell groceries, are at least as spiffy as many a Safeway or a Kroger supermarket.
Given that fuel isn't going to get cheaper, you might as well stop reading now if your opinion of Wal-Mart starts and stops at the gas pump -- you'll probably never buy this stock. That would be shortsighted. True, the shares are about where they were in 1999. But Wal-Mart remains a great company, and its stock is as cheap as it's ever been. The company sports a high return on equity (23%, compared with 18% ten years ago) and a historically modest price-earnings ratio of 16 (based on estimated earnings of $2.94 per share for the year ending next January).
From just $107.88 $24.99 for Kiplinger Personal Finance
Be a smarter, better informed investor.
Sign up for Kiplinger’s Free Newsletters
Profit and prosper with the best of expert advice on investing, taxes, retirement, personal finance and more - straight to your e-mail.
Profit and prosper with the best of expert advice - straight to your e-mail.
Moreover, Wal-Mart hasn't saturated the American landscape as much as you might think it has. There are 215 Wal-Marts (including Sam's Club stores) in Florida and 194 in California. But there are more than 400 in Texas. And there are still plenty of global opportunities. China, for instance, contains just 56 Wal-Mart stores.
Maybe nothing much will emerge from Friday's sessions. But if there is news, odds are that it's more likely to be favorable than harmful.
--Jeffrey Kosnett
-
I was laid off in my 40s and took a lower-paying job. I'm can't contribute to my retirement savings until my income rises, and I only have $200,000. Help!The pain of underemployment is real. We ask financial experts for advice.
-
I'm a Retirement Psychologist: Here's Why Doing What You 'Ought' in Retirement Beats Doing Whatever You WantTrue retirement freedom isn't about simply doing whatever you want, but about finding purpose and direction through commitments that align with your deepest values and allow you to contribute meaningfully.
-
If You'd Put $1,000 Into UnitedHealth Group Stock 20 Years Ago, Here's What You'd Have TodayUNH stock was a massive market beater for ages – until it wasn't.
-
Coulda, Woulda, Shoulda: Are These 5 Stocks Too Overvalued to Buy Now?Investors worried about missing the boat on overvalued stocks need not fret. These five names, while expensive, are still seeing lots of love from analysts.
-
S&P 500 Extends Losing Streak Ahead of Powell Speech: Stock Market TodayStocks continued to struggle ahead of Fed Chair Powell's Friday morning speech at Jackson Hole.
-
Stocks Struggle Ahead of Busy Fed Week: Stock Market TodayThe minutes from the July Fed meeting will be released Wednesday, while Chair Powell will deliver a key speech at Jackson Hole on Friday.
-
Dow Hits New Intraday High: Stock Market TodayValue-hunters with big stakes in a particular component kept one of the main U.S. equity indexes in positive territory.
-
What Tariffs Mean for Your Sector ExposureNew, higher and changing tariffs will ripple through the economy and into share prices for many quarters to come.
-
How to Invest for a Fall Interest Rate Cut by the FedA lot can happen between now and then, but the probability the Fed cuts interest rates in September is back above 80%.
-
Are Buffett and Berkshire About to Bail on Kraft Heinz Stock?Warren Buffett and Berkshire Hathaway own a lot of Kraft Heinz stock, so what happens when they decide to sell KHC?
