Thursday, August 25, 2011

Can Wal-Mart get any better?

Full Article and Charts

Anytime a natural disaster is coming Wal-Mart always anticipates what its customers will need to recover and has those items already in transit before the storm ever hits.  They could only do that because they have one of the most complete and comprehensive inventory control and logistics systems on this planet.  This is what gives Wal-Mart the competitive advantage over all other retailers.  They know what their customers need and want and they can purchase and get it on the shelves at the lowest possible cost.  How do they keep doing this?




Barchart technical indicators:
  • Barchart 40% short term technical Buy signal getting stronger
  • Trend Spotter technical Hold that should flop to a Buy near 54
  • Trading above its 20, 50 and 100 day moving average
  • 4 new highs in the last 5 days and up 3.53% for that period
  • Relative Strength Index is 59.26% and rising
  • Barchart computes a technical support level at 52.59
  • The stock recently traded at 53.37 which is above its 50 day moving average of 52.29
  • The price is only 5.89% off its one year high vs. 19.13% off for the market as measured by the Value Line Index

    Summary: Wal-Mart (WMT) will make money and the only question is how much?  The company is predicted to make increases in both sales and earnings and analysts have noted that these projection appear to be rock solid.  I'm advising a buy because the growth projections for sales and earnings are better than the growth projections for the economy as a whole and the stock is trading at a 25% discount to the P/E ratio of the market as a whole.  If it all comes together investors buying in today should see a total return between 11% - 13% annually over the next 5 years.

    Jim Van Meerten is a Marketocracy Master




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