Opinion on  WalMart Stores Inc (WMT)     Sector: Services  >  Industry: Retail (Department & Discount)
WMT

even though they could take the stock higher i believe the stock is do for a flush. There is a feeling of manipulation, like they are trying to walk up the price. I also get the feeling like there is bad news looming. They said that they are reducing prices even further in china on needed items. So i see this eating into margin. I believe they are also doing this to try and gain business/ market share. Price wars are never good for businesses over a certain time period. How long that period can be is anyones guess. I believe wmt is fortunate and the only reason it does as well as it does is in part because it sells gas and groceries. They would be doing much worse if not. Also the put options are trading very large numbers almost 20,000 at the 50 strike for december and january, which suggest they are expecting the price to fall. I havn't been able to read the fillings lately so I don't know what kind of expsure they might have to cds mortages or any other investments which could cause for loss or writedowns. These are only my opinions. I still think the stock is over valued. Do your homework before you make any investing decisions. 

WMT talking about making aquisition of DYS. Target also says it is going to slash prices even harder in efforts to try and take more share from walmart. An aquiring company usually drops in price, coupled with all these discounters trying even harder to cut each others throat. Maybe this is part of the other shoe starting to drop. So many people talking up wmt. I just don't buy it. I don't even shop at WMT. These are only my opinions.

Like i said i had a feeling negative occurances would start comming to light. As of now they are talking about lawsuit settlmnts. News article says WMT continuing ops will be affected by around .06 cents eps. Is that the real#? We'll have to wait and see. Is there anything else lurking around the corner? I beleive there is. I still would expect a p/e of at least 11 with in the next 12 months. Based on eps of 3.50 that implys a price of 38.50. These are only my oppinions.

You gotta love it. Everyone has been in love with and feverishly pumping WMT day after day. Now DEC.30 ,2008 Bloomerg in morning premarket shows chart of WMT and talks about how it is having technical problems according to its moving averages like it is showing overhead resistance at its 200day avg. WMT has closed below its 200day mov.avg.  for the last 14 sessions. Its 100 day mov.avg. has just recently crossed its 200day avg. to the downside. Its 50day is below its 200 and its 8 and 21 day look like they might cross back under the 50day. Yes these are bearish signals and imply the stock is showing weakness and could be headed lower. What bothers me about the stock though is that they just keep pumping it day after day. To me this has never been a good indicator for buying a stock. Usualy something ugly crawls out of the woodwork. Also this stock didn't sell off the way even better stocks did in the downturn in october. I think JNJ,MCD, and XOM are better in there performance financialy EPS and growth wise and they sold off harder. They took them down to more attractive buy points. In my oppinion they didn't take WMT to an attractive risk vs. reward buy level. This does not mean that they can't take WMT higher. However if I was going to put my money to work in this stock I would be looking for between 24.65 to 35 as an attractive risk vs. reward level to start with my hard earned money. These are only my oppinions. I hope these thoughts are helpfull and if nothing else entertaining.

Read the sec filings. Don't forget WMT has a tender offer on the table to buy the shares of the south american grocer. Usualy when a company purchases another company the purchasing companies share price will fall considering the value of the transactio. So be mindful of this if you are purchasing shares of WMT. The price tag of the offer is roughly 2.66BILLION US. Shares short have incresed as of late from 48mil to a little over 49mil. The best of all is when these guys award themselves large amounts of stock options. Scott H Lee Jr. awraded 70,000 shares. Gross value 3.85 mill. Sweet. Castro Wright 39,216 shares. Gross value 2.16mill. Sweet. Duke Michael T. 39,216 share. Gross value 2.16mill. also Sweet.

I had a feeling we were going to see some shoes falling. To much cheerleading for WMT was going on also the trade was crowded. WMT will come under pressure in this poor economy just like everyone else. Now WMT has an estimated EPS of  3.33 Given a P/E of 11 I would expect to see WMT price around 36 to 37. There is aslo still a gaps in the chart at 49.70, 42.30, and from long ago at 24.65. Over time it will come back and fill these gaps. On the 24 year chart running a fib retrace a 50% pullback from its all time high puts the stock price at around 36 to 37. Over the longer term I am looking for a retrace to the 61.8% level wich is around  $27. WMT had been in a very long basing period befor its break to $63.80. So I am watching to see if it breaks  the lower end of the $40 range. These are only my thoughts and oppinions.

WMT issuing 1billion in lnoger term debt. My question is why? Are they using it to do the deal and buy that latin american grocer i talked about in one of my previous analysis. They say it's for general corporate use. Good for them I hope they put it to good use. I still ask why are they issuing 1Bill. in debt. They are such a great company. Such a huge cash generating machine. I remain very leary of this stock. It's a 3bill. + share pig that is a dow component. It's used to help manipulate the DOW numbers. I am waiting to see WMT break below $50 level and hold. I still expect the stock to go back to the 24.65 sometime within 12 months. That doesn't mean that they can't push it higher of course. These are only my opinios.

Credit swiss cheese analyst now feel s that WMT needs down grade. Due to strugling environment, forex rate challenges and a few  other reasons. You can read it for yourself. Personaly I think he is just a little late on the call. He also says WMT doesn't deserve the high P/E that it has been given. WMT has had a historical low P/E of 11 at some point in time over the last 10years I believe. You can also verify this info for accuracy. So based on a historical low P/E of 11 and an eps of about 3.40  for 2009 earnings. This is how I get my minimum downside target of around  $37 per share. There is also still a gap that needs to be filled at about 42.30 and another one at 24.65. This is why i have a longer term trgt. of 24.65. I know if I was going to buy it wouldn't be till around the  $20 dollar level. This is the only place where risk/reward would start to make any sense. These are only my oppinions that I share. Do your own home work when making investment decisions and don't believe everything you hear from Wallstreet or people making recs. on theses sites.

I told you I thought they were issuing 1 bill of debt to use for 50% purchase of that latin grocer. Funny how they just announced the news of successful purchase for 50% stake not to long after they announce the 1 bill debt issuance.