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2023-12-16 00:00:00
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2023-12-16
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WMT
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Below is Validea's guru fundamental report for WALMART INC (WMT). Of the 22 guru strategies we follow, WMT rates highest using our Multi-Factor Investor model based on the published strategy of Pim van Vliet. This multi-factor model seeks low volatility stocks that also have strong momentum and high net payout yields.
WALMART INC (WMT) is a large-cap growth stock in the Retail (Grocery) industry. The rating using this strategy is 87% based on the firm’s underlying fundamentals and the stock’s valuation. A score of 80% or above typically indicates that the strategy has some interest in the stock and a score above 90% typically indicates strong interest.
The following table summarizes whether the stock meets each of this strategy's tests. Not all criteria in the below table receive equal weighting or are independent, but the table provides a brief overview of the strong and weak points of the security in the context of the strategy's criteria.
MARKET CAP: PASS
STANDARD DEVIATION: PASS
TWELVE MINUS ONE MOMENTUM: NEUTRAL
NET PAYOUT YIELD: NEUTRAL
FINAL RANK: FAIL
Detailed Analysis of WALMART INC
WMT Guru Analysis
WMT Fundamental Analysis
More Information on Pim van Vliet
Pim van Vliet Portfolio
About Pim van Vliet: In investing, you typically need to take more risk to get more return. There is one major exception to this in the factor investing world, though. Low volatility stocks have been proven to outperform their high volatility counterparts, and do so with less risk. Pim van Vliet is the head of Conservative Equities at Robeco Asset Management. His research into conservative factor investing led to the creation of this strategy and the publication of the book "High Returns From Low Risk: A Remarkable Stock Market Paradox". Van Vliet holds a PhD in Financial and Business Economics from Erasmus University Rotterdam.
Additional Research Links
Top NASDAQ 100 Stocks
Factor-Based ETF Portfolios
Harry Browne Permanent Portfolio
Ray Dalio All Weather Portfolio
High Shareholder Yield Stocks
About Validea: Validea is aninvestment researchservice that follows the published strategies of investment legends. Validea offers both stock analysis and model portfolios based on gurus who have outperformed the market over the long-term, including Warren Buffett, Benjamin Graham, Peter Lynch and Martin Zweig. For more information about Validea, click here
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
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2023-12-16
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WMT
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The Dow Jones Industrial Average is a great place to go shopping if you're an investor seeking passive income. This collection of 30 of the world's largest publicly traded businesses is packed with companies that have stellar track records for earnings growth. Their dividend yields provide instant cash returns, too, with a high chance of steady annual hikes on the way for many years into the future.
It doesn't take a very large investment to start to build that income stream, either. With a $15,000 investment split about evenly between Walmart (NYSE: WMT) and Home Depot (NYSE: HD), for example, you'd receive about $300 annually, or 2% on your cost. Here's why that's an attractive option for dividend stock investors today.
Walmart is well-positioned
Walmart's dividend yield is relatively small at 1.5%, but don't let that issue scare you away from this stock. The retailer is checking all the right boxes for investors, after all.
Sales growth was a healthy 5% year over year in the most recent quarter, putting it well ahead of peers like Target. Shoppers are more focused on saving money and on buying consumer essentials like groceries these days, and that trend favors Walmart's focus on value.
Look beyond the headline numbers and there's even better news for this retailer. Walmart's customer traffic is solidly positive, and shoppers are spending more with each visit. Profit margins are improving as well. Sure, Walmart's executive team had some cautious comments about short-term growth trends. But its slim inventory holdings and strong traffic trends mean it has a good chance of continuing its positive momentum into 2024 and beyond.
Home Depot will bounce back
It's understandable that Home Depot stock would trail the market this year as rising interest rates have slowed the housing market. The company has been through many previous downturns, though, including the Great Recession. It emerged from each of these slumps to set new sales records, though. Look for another such rebound ahead, potentially starting in 2024.
Home Depot is expecting comparable-store sales to drop by between 3% and 4% this year, roughly consistent with the declines expected by peer Lowe's. Yet profits will remain strong.
Home Depot's operating margin is on track to stay above 14% of sales. Home Depot is also one of the market's most efficient businesses when it comes to return on invested capital. That's a sure sign the management team is good at allocating excess cash, whether that means more investments in the e-commerce infrastructure, stock buybacks, or a rising dividend.
Home Depot aims to return 55% of annual earnings to shareholders in the form of dividend payments. That's more generous than Lowe's 35% goal and is one reason why its yield is so high.
Sure, the dividend stock might underperform if the economy tilts into a recession in the coming quarters. But that's a normal part of the retailing world. Income investors can look past those short-term swings to focus on Home Depot's bright future as it keeps capitalizing on its dominant position in the attractive home improvement industry.
Should you invest $1,000 in Home Depot right now?
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Demitri Kalogeropoulos has positions in Home Depot. The Motley Fool has positions in and recommends Home Depot, Target, and Walmart. The Motley Fool recommends Lowe's Companies. The Motley Fool has a disclosure policy.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
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2023-12-16
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WMT
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While looking for a stock that could double within five years may sound like a lofty aspiration, it may be more within reach than most people realize. Requiring a 15% annualized return for five years, an investment needs to slightly outperform the market's historical annualized total return of roughly 11% to 12% to accomplish this feat.
Additionally, by focusing on dividend growth stocks with well-funded dividends and a history of solid returns on invested capital, investors can further stack the odds of meeting this 15% threshold in their favor. United Parcel Service (NYSE: UPS) and Murphy USA (NYSE: MUSA) are two companies that fit this simple billing.
Trading at a discount to the S&P 500's valuations, here's why these two businesses look primed to outperform over the next five years and beyond.
Is a rebound en route for UPS?
With Amazon recently surpassing UPS and FedEx as the largest delivery business in the U.S., it may not seem like a great time to buy UPS. Worse yet for UPS, Amazon isn't just the company's biggest competitor now but is still its largest customer, accounting for 11% of its total revenue in 2022. While the two companies still work together, it is not unreasonable to imagine this partnership ending at some point -- just like FedEx did with Amazon in 2019.
So, with this bad news laid out -- what on Earth makes UPS an attractive dividend stock over the next five years? Three things:
1. The start of a rebound
Announcing a new five-year contract with its workers in August, UPS has begun reeling customers back in who had temporarily gone elsewhere due to the uncertainty stemming from the labor dispute. During the company's third-quarter earnings, CFO Brian Newman explained that from August 2022 to October 2022, daily shipments increased by 1.5 million.
However, this figure has jumped to 2.7 million over the same time this year, highlighting that UPS is rebounding off of its lows in August -- despite an awful macroeconomic environment. Should this 90-day increase extend throughout the year, it would account for roughly 5% sales growth.
2. Leveraging its massive network for future growth
Building upon its entrenched position within the industry, UPS is now focusing on specialized (and more profitable) niches such as time-sensitive and temperature-controlled healthcare shipping. Recently acquiring MNX Global Logistics in 2023 and Bomi Group in 2022, the company now expects its healthcare vertical to account for more than 10% of sales by the end of the year.
These acquisitions not only strengthen UPS's healthcare ambitions, but support its international growth story, providing footholds in Latin America, Europe, and Asia. Pair these acquisitions with a joint venture focused on India's $5 trillion economy, and investors should expect to see international unit quickly grow to account for more than its current 20% of UPS's sales.
3. A top-tier return on invested capital
UPS currently has a return on invested capital (ROIC) of 21%, which places it in the top quintile among its S&P 500 peers. This is important for investors as stocks with an ROIC in the top 20 percentile tend to outperform their lower-ranked competitors. Measuring a company's profitability compared to its debt and equity, UPS' high mark is promising as it highlights its ability to generate outsize profits despite the heavy capital expenditures needed to maintain its network.
And the icing on the cake for investors? The stock's valuation remains near 10-year lows while its dividend yield is near 10-year highs.
UPS PE Ratio data by YCharts
Aiming for 15% annualized growth over the next five years to reach the goal of doubling your money, UPS' hefty yet well-funded 4.2% dividend yield significantly improves your odds. Raising its dividend every year since the Great Recession, UPS looks like an ideal candidate to double your money in five years as it continues to rebound, operationally and valuation-wise, from this once-in-a-decade low.
Murphy USA: Obliterating the market's returns, but few are noticing
Delivering a total return of over 800% since its spinoff from Murphy Oil in 2013, convenience store chain Murphy USA has been one of the most successful stocks of the last decade, yet few investors may recognize the company. Home to over 1,700 stores -- the vast majority of which are located close to a Walmart thanks to a past partnership -- Murphy USA is now the fourth-largest convenience chain in the U.S. by store count.
This massive network begets advantageous fuel-sourcing agreements for the company, letting it pass along lower gas prices to its customers. Thanks to this top-tier cost structure advantage, Murphy's cost per gallon is typically $0.05 to $0.10 lower than its peers in the bottom half of the National Association of Convenience Stores. These price savings attract value-focused customers and open up the opportunity for merchandise sales.
With 60% of the gas stations in the U.S. run by single-store operators who cannot compete against Murphy USA's pricing, this significant cost advantage should not dwindle anytime soon. Additionally, the fragmentation of the convenience store industry makes it ripe for consolidation, providing the company with an incredibly long potential growth runway via mergers and acquisitions should it continue to go down that path. Acquiring QuickChek and its 157 stores in 2021, Murphy expanded into the Northeast while adding new food and beverage and electric vehicle charging capabilities.
Currently owning an impressive 21% ROIC, Murphy USA generates boatloads of net income and free cash flow -- the vast majority of which it immediately returns to shareholders through share buybacks and dividends.
MUSA Free Cash Flow data by YCharts
Thanks to these buybacks -- which have lowered the company's outstanding shares by 54% since 2013 -- and a new dividend that has been raised for seven consecutive quarters, Murphy USA looks like a solid buy at just 15 times earnings.
Should you invest $1,000 in United Parcel Service right now?
Before you buy stock in United Parcel Service, consider this:
The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now... and United Parcel Service wasn't one of them. The 10 stocks that made the cut could produce monster returns in the coming years.
Stock Advisor provides investors with an easy-to-follow blueprint for success, including guidance on building a portfolio, regular updates from analysts, and two new stock picks each month. The Stock Advisor service has more than tripled the return of S&P 500 since 2002*.
See the 10 stocks
*Stock Advisor returns as of December 11, 2023
American Express is an advertising partner of The Ascent, a Motley Fool company. John Mackey, former CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool's board of directors. Josh Kohn-Lindquist has positions in FedEx, Mastercard, Murphy Usa, United Parcel Service, and Visa. The Motley Fool has positions in and recommends Amazon, FedEx, Mastercard, Visa, and Walmart. The Motley Fool recommends Murphy Oil, T-Mobile US, United Parcel Service, and Verizon Communications and recommends the following options: long January 2025 $370 calls on Mastercard and short January 2025 $380 calls on Mastercard. The Motley Fool has a disclosure policy.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
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2023-12-15
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WMT
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Today’s episode of Full Court Finance at Zacks explores the bullish market rally following the Fed’s rate cut outlook. Despite the impressive run for the Nasdaq and the S&P 500 in 2023, many large-cap stocks have underperformed for various reasons. The three highly-ranked stocks we dig into today—DocuSign (DOCU), Nike (NKE), and Target (TGT)—are all trading at least 30% below their highs and could be poised for serious comebacks in 2024.
Jay Powell and the Fed gave the green light to the bulls on Wednesday when the world’s most important central bank signaled the possibility of three rate cuts in 2024. The 10-year U.S. Treasury is back below 4% (3.92%) after sitting at 5% in late October as Wall Street rapidly prices in lower rates.
The Fed’s newfound dovishness finally confirms what the bulls have been saying and doing for a large chunk of 2023 and certainly since the end of October. The S&P 500 appears on the cusp of summiting a new peak by the end of 2023 or early 2024.
All of this strength came before we even entered the official Santa Claus rally period, which includes the final five trading days of the year and the first two trading days of the new year.
There will likely be some selling and choppiness in the weeks and months ahead. Still, more money is poised to flow into stocks in 2024 as the calculus on cash and bonds changes and investors grow increasingly nervous about missing out again.
DocuSign, Inc. (DOCU)
DocuSign crushed our Q3 FY24 EPS estimate on December 7 and raised its guidance to help it land a Zacks Rank #1 (Strong Buy) right now. DOCU stock has soared 30% in the last month to retake its 50-day, its 200-day, and its long-term 50-week moving averages. Yet, the e-signature stock still trades over 80% below its record highs after it got crushed for slowing growth and weak bottom-line results.
DOCU’s revenue soared following its 2018 IPO, including four straight years of between 35% to 49% growth (19% last year in FY23). The company remains a powerhouse of electronic signatures, document generation, and beyond as medical forms, legal documents, and much more are becoming increasingly paperless. DocuSign has responded to its slower growth and higher rate environment by cutting costs, changing leadership, and rolling out other efforts to streamline its business.
Image Source: Zacks Investment Research
DocuSign’s valuation levels remain sky-high. But DOCU is focused on the bottom line. Investors might want to consider the e-signature and digital document firm with 1.4 million customers as Wall Street begins to search high and low for technology stocks that are still trading far below their highs.
Nike, Inc. (NKE)
Nike trades around 30% below its highs heading into its Q2 FY24 earnings release on December 21. Wall Street sold Nike shares based on fears about growing competition and other headwinds. NKE also got caught up in the broader consumer discretionary selloff. Nike certainly faces increased competition from relative newcomers Hoka and On in the running shoe segment and among consumers looking for maximum comfort and support at their jobs. Adidas, Lululemon, and digital native upstarts are also fighting for a larger share of the so-called streetwear market or the fashion end of sportswear.
Despite more challengers, Nike remains the heavyweight champion of sportswear and one of the most valuable brands in the world alongside the likes of Coca-Cola. NKE has treaded down a new direct-to-consumer-heavy path in both brick-and-mortar and e-commerce. Nike’s sales are projected to climb 4% this year and over 8% higher next year to help boost its adjusted earnings by 16% and 17%, respectively, based on Zacks estimates.
Image Source: Zacks Investment Research
Nike’s earnings revisions help it land a Zacks Rank #2 (Buy) right now and its Shoes and Retail Apparel segment is in the top 23% of over 250 Zacks industries. Nike has climbed 850% during the last 15 years vs. the S&P 500’s 420% and its sector’s 220%. Nike is up 73% in the past five years, even though it trades 30% below its highs. Nike has retaken its 50-day and 200-day and is on the cusp of climbing above its very long-term 50-month moving average. Nike trades near its 10-year median at 29.7X forward 12-month earnings and pays a dividend.
Target (TGT)
Target posted blowout Q3 earnings results in mid-November and provided upbeat guidance that helped it capture a Zacks Rank #2 (Buy). The strong bottom-line performance extended its recent rebound that has TGT stock up 30% since the start of the fourth quarter. Even with the comeback, the retail standout trades 45% below its highs.
TGT’s resurgence has taken it right to its 50-week moving average and solidly above its 200-day and 50-day. Target trades at a 30% discount to its sector, 32% below Walmart (WMT), and close to TGT’s 10-year median. TGT stock is far more than a plummeting pandemic winner. Target crushed Walmart over the last 15 years, up 310% vs. 170% despite its massive fall from its 2021 highs.
Image Source: Zacks Investment Research
Target, like many others, failed to adapt to quickly changing consumer shopping patterns over the last year-plus. The firm is also dealing with other setbacks. But it appears that TGT is finally finding its footing again. TGT’s adjusted earnings are projected to soar 39% this year and then climb another 9% higher next year. And its dividend yields 3.2% right now.
Zacks Names "Single Best Pick to Double"
From thousands of stocks, 5 Zacks experts each have chosen their favorite to skyrocket +100% or more in months to come. From those 5, Director of Research Sheraz Mian hand-picks one to have the most explosive upside of all.
It’s credited with a “watershed medical breakthrough” and is developing a bustling pipeline of other projects that could make a world of difference for patients suffering from diseases involving the liver, lungs, and blood. This is a timely investment that you can catch while it emerges from its bear market lows.
It could rival or surpass other recent Stocks Set to Double like Boston Beer Company which shot up +143.0% in little more than 9 months and NVIDIA which boomed +175.9% in one year.
Free: See Our Top Stock And 4 Runners Up
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
NIKE, Inc. (NKE) : Free Stock Analysis Report
Target Corporation (TGT) : Free Stock Analysis Report
Walmart Inc. (WMT) : Free Stock Analysis Report
DocuSign (DOCU) : Free Stock Analysis Report
To read this article on Zacks.com click here.
Zacks Investment Research
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
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2023-12-15
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WMT
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Below is Validea's guru fundamental report for WALMART INC (WMT). Of the 22 guru strategies we follow, WMT rates highest using our Multi-Factor Investor model based on the published strategy of Pim van Vliet. This multi-factor model seeks low volatility stocks that also have strong momentum and high net payout yields.
WALMART INC (WMT) is a large-cap growth stock in the Retail (Grocery) industry. The rating using this strategy is 87% based on the firm’s underlying fundamentals and the stock’s valuation. A score of 80% or above typically indicates that the strategy has some interest in the stock and a score above 90% typically indicates strong interest.
The following table summarizes whether the stock meets each of this strategy's tests. Not all criteria in the below table receive equal weighting or are independent, but the table provides a brief overview of the strong and weak points of the security in the context of the strategy's criteria.
MARKET CAP: PASS
STANDARD DEVIATION: PASS
TWELVE MINUS ONE MOMENTUM: NEUTRAL
NET PAYOUT YIELD: NEUTRAL
FINAL RANK: FAIL
Detailed Analysis of WALMART INC
WMT Guru Analysis
WMT Fundamental Analysis
More Information on Pim van Vliet
Pim van Vliet Portfolio
About Pim van Vliet: In investing, you typically need to take more risk to get more return. There is one major exception to this in the factor investing world, though. Low volatility stocks have been proven to outperform their high volatility counterparts, and do so with less risk. Pim van Vliet is the head of Conservative Equities at Robeco Asset Management. His research into conservative factor investing led to the creation of this strategy and the publication of the book "High Returns From Low Risk: A Remarkable Stock Market Paradox". Van Vliet holds a PhD in Financial and Business Economics from Erasmus University Rotterdam.
Additional Research Links
Top Large-Cap Growth Stocks
Factor-Based Stock Portfolios
Dividend Aristocrats 2023
High Insider Ownership Stocks
Top S&P 500 Stocks
About Validea: Validea is aninvestment researchservice that follows the published strategies of investment legends. Validea offers both stock analysis and model portfolios based on gurus who have outperformed the market over the long-term, including Warren Buffett, Benjamin Graham, Peter Lynch and Martin Zweig. For more information about Validea, click here
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
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2023-12-15
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WMT
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InvestorPlace - Stock Market News, Stock Advice & Trading Tips
E-commerce has revolutionized the way people buy products and services. The convenience of e-commerce has led to the collapse of American shopping malls. Picking the right e-commerce stocks in the early 2000s could have yielded generational wealth for investors.
While getting into e-commerce now isn’t the same opportunity as in the early 2000s, the industry is still growing quickly. E-commerce is projected to achieve a compounded annual growth rate of 10.15% from now until 2028.
Surprisingly, only one-third of people shop online, which means the industry still has plenty of room to grow. Investors who want to profit from that growth may want to consider these top e-commerce stocks.
E-Commerce Stocks: Shopify (SHOP)
Source: Burdun Iliya / Shutterstock.com
Shopify (NYSE:SHOP) is an e-commerce platform that helps companies create online stores and sell products. The company has monthly subscriptions, which results in annual recurring revenue that investors can count on.
Switching from Shopify is difficult, and doing so will result in businesses shutting down their e-commerce operations. Most businesses will continue to pay Shopify’s monthly subscription unless they are on the brink of bankruptcy.
The company is leveraging its billions of interactions for machine learning to optimize its platform and increase sales for its merchants. Those efforts and others have paid off. Shopify recently reported its best Black Friday ever as merchants on the platform drummed up $4.1 billion in sales.
Shopify continues to deliver high growth for investors. Revenue increased by 25% year-over-year, while gross profit jumped by 36% year-over-year. The company reported its fourth consecutive quarter of positive free cash flow, which reached 16% of revenue.
Amazon (AMZN)
Source: Tada Images / Shutterstock.com
Amazon (NASDAQ:AMZN) is the face of e-commerce and the company that made the industry mainstream. The stock had been a bit slow for a few years but has come back to life with a 71% year-to-date gain.
Even with the company’s high penetration into e-commerce, Amazon continues to report double-digit year-over-year revenue growth. Net sales increased by 13% in the third quarter, while net income soared to $9.9 billion.
Amazon isn’t just an e-commerce company anymore. The tech conglomerate offers several avenues for growth, such as Amazon Web Services and Twitch. Andy Jassy, Amazon CEO, shared excitement about three business segments. The first two come as no surprise: Amazon Stores and AWS.
However, Jassy also mentioned that the company’s advertising revenue grew robustly. Of the many business segments under the Amazon umbrella, it’s exciting to see ad revenue get mentioned alongside stores and AWS.
Amazon has been breaking into the walled gardens of online advertising, and it makes sense. People don’t go on search engines or social media to buy goods and services. However, many people go on Amazon with the intent to buy something or plan their next purchase.
Businesses can get better ad results if their customers have that mindset. Amazon gives them that opportunity, and their advertising business generates more revenue and earnings growth in the future.
Perion (PERI)
Source: photobyphm / Shutterstock.com
Perion (NASDAQ:PERI) is a smaller advertising company that combines impressive growth rates with a low valuation. While investors have kept many e-commerce stocks on their radar, Perion remains relatively unknown despite its financial performance.
Perion has a forward P/E ratio of nine, which is something investors would expect from a telecom stock like Verizon (NYSE:VZ) or AT&T (NYSE:T). Despite the low valuation, Perion achieved 17% year-over-year revenue growth and 28% year-over-year net income growth while having no debt. The company has more than three times the amount of total assets than total liabilities.
Perion offers advertising solutions for search engines, social media, video, CTV, and other major digital advertising channels. Many brands turn to the growing advertising company for ad placements and optimal performance. That trend continued as Perion reported its best Black Friday e-commerce sales volume ever. The company also recently released a generative AI-powered dynamic audio advertising solution that is leading to more demand.
The fast-growing advertising company has a $1.3 billion market cap and has gained 11% year-to-date. The stock’s 944% growth over the past five years highlights the potential for lofty returns. Thus, it is one of my top picks when it comes to e-commerce stocks.
Lululemon Athletica (LULU)
Source: lentamart / Shutterstock
Lululemon Athletica (NASDAQ:LULU) has been a great stock for long-term investors. Shares have gained 51% year-to-date and are up by 311% over the past five years. The athletic apparel company has many retail locations in North America and uses its online store to generate more sales.
Revenue growth has decelerated in recent quarters due to macroeconomic headwinds, but Lululemon Athletica remains well ahead of competitors like Nike (NYSE:NKE). In the third quarter, revenue increased by 19% year-over-year compared to Nike’s 2% year-over-year revenue jump.
Lululemon Athletica expanded its physical presence with 14 additional stores and closed out the quarter with 686 stores. The company is trendy among younger consumers and is growing faster than many of its competitors.
The company recently announced a $1 billion stock repurchase program, which will further reward long-term investors. Lululemon Athletica’s leadership has demonstrated commitment to increasing shareholder value in addition to reporting strong financials. Lululemon Athletic enjoys double-digit profit margins and looks like a candidate that may offer dividends by the end of the decade.
Walmart (WMT)
Source: fotomak / Shutterstock.com
Walmart (NYSE:WMT) is the largest retailer in the world and is a popular destination for people who want to save money on various products. Walmart specializes in getting the lowest prices and operates over 10,000 stores in more than 20 countries.
Walmart shares took a breather in November after a nice rally and are up by 5% year-to-date. Shares have gained 64% over the past five years. The retailer reported 5.2% year-over-year revenue growth in the third quarter. The company also reported 15% year-over-year e-commerce growth in the same quarter.
Walmart’s retail international segment is growing at a faster rate than U.S. sales. Interestingly, e-commerce is having the opposite trend. While international e-commerce sales dropped by 3% year-over-year, U.S. e-commerce sales grew by 24% year-over-year.
Walmart is dabbling in advertising just like Amazon and reported an impressive 26% year-over-year growth rate for Walmart Connect advertising sales. Ads still make up a small portion of Walmart’s total revenue. However, in-store ads combined with online ads on Walmart’s site can lead to more growth in the years to come. If advertising continues to grow at this pace, it will eventually influence a larger percentage of Walmart’s total revenue. It is one of the best e-commerce stocks you can buy, in my opinion.
Alphabet (GOOG, GOOGL)
Source: IgorGolovniov / Shutterstock.com
Many e-commerce businesses run advertisements to attract potential customers. Alphabet (NASDAQ:GOOG, NASDAQ:GOOGL) is one of the top resources for these business owners due to the company’s platforms and ad targeting capabilities.
Google and YouTube are two of the many subsidiaries under the Alphabet umbrella. The company also gives investors exposure to exciting segments like artificial intelligence and the cloud.
Alphabet stock has been a reliable winner for long-term investors. Shares have gained 47% year-to-date and are up by 156% over the past five years. Alphabet’s third-quarter results suggest that the gains can continue. The online advertising giant reported 11% year-over-year revenue growth and 41.6% year-over-year net income growth.
Google Cloud continues to grow at a robust pace. That business segment grew by 22.5% year-over-year and reached $8.4 billion in revenue. Google Cloud powers up many websites and makes up more than 10% of total revenue. Google Cloud is compensating for a slowdown in Google advertising revenue growth, which only came in slightly below 10% year-over-year.
MercadoLibre (MELI)
Source: rafapress / Shutterstock.com
MercadoLibre (NASDAQ:MELI) is an Argentine e-commerce and fintech company that delivers exceptional top-line and bottom-line growth. MercadoLibre’s e-commerce platform has been around for over 20 years and helps everyone from small sellers to large official stores. The marketplace has millions of sellers.
MercadoLibre is the largest marketplace in Latin America. Growth is high across the board, especially in Mexico and Brazil. The stock has rewarded long-term investors by almost doubling year-to-date. Long-term gains paint an even better picture, as shares are up by almost 400% over the past five years.
The company has generated strong returns for shareholders through its impressive finances. Revenue soared by 40% in the third quarter while net income comfortably surpassed expectations and almost tripled year-over-year.
MercadoLibre isn’t the cheapest e-commerce play if investors look at the conventional P/E ratio. Shares currently trade at an 80 P/E ratio and a 46 forward P/E ratio. However, the stock’s PEG ratio is under one, which some investors interpret as an undervalued stock. Even investors who look at companies based on their P/E ratios have been willing to pay a premium for exposure to MercadoLibre stock.
On this date of publication, Marc Guberti held long positions in SHOP and PERI. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
Marc Guberti is a finance freelance writer at InvestorPlace.com who hosts the Breakthrough Success Podcast. He has contributed to several publications, including the U.S. News & World Report, Benzinga, and Joy Wallet.
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The post Next-Generation Retail: 7 Stocks Innovating in E-Commerce appeared first on InvestorPlace.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
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2023-12-14
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WMT
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Among the underlying components of the S&P 500 index, we saw noteworthy options trading volume today in Walmart Inc (Symbol: WMT), where a total of 80,235 contracts have traded so far, representing approximately 8.0 million underlying shares. That amounts to about 75.4% of WMT's average daily trading volume over the past month of 10.6 million shares. Especially high volume was seen for the $155 strike call option expiring December 15, 2023, with 7,910 contracts trading so far today, representing approximately 791,000 underlying shares of WMT. Below is a chart showing WMT's trailing twelve month trading history, with the $155 strike highlighted in orange:
Zions Bancorporation, N.A. (Symbol: ZION) options are showing a volume of 16,416 contracts thus far today. That number of contracts represents approximately 1.6 million underlying shares, working out to a sizeable 75.3% of ZION's average daily trading volume over the past month, of 2.2 million shares. Especially high volume was seen for the $37.50 strike put option expiring January 19, 2024, with 4,500 contracts trading so far today, representing approximately 450,000 underlying shares of ZION. Below is a chart showing ZION's trailing twelve month trading history, with the $37.50 strike highlighted in orange:
And General Electric Co (Symbol: GE) saw options trading volume of 27,994 contracts, representing approximately 2.8 million underlying shares or approximately 73.1% of GE's average daily trading volume over the past month, of 3.8 million shares. Especially high volume was seen for the $105 strike call option expiring March 15, 2024, with 18,016 contracts trading so far today, representing approximately 1.8 million underlying shares of GE. Below is a chart showing GE's trailing twelve month trading history, with the $105 strike highlighted in orange:
For the various different available expirations for WMT options, ZION options, or GE options, visit StockOptionsChannel.com.
Today's Most Active Call & Put Options of the S&P 500 »
Also see:
Dividend Stocks
FOSL market cap history
VO shares outstanding history
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
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2023-12-14
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WMT
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InvestorPlace - Stock Market News, Stock Advice & Trading Tips
As we get ready to start 2024, investors can’t turn on thefinancial newswithout hearing one or both sides of the soft landing debate. The question is whether the Federal Reserve can bring inflation down and cool down the economy without causing a recession. So, is it time to look for soft landing stocks, that is, stocks that will go up if this scenario comes to pass?
To answer that question, you must decide if the economy can achieve a soft landing. To be clear, I have an opinion, but so does everyone. It may be useful for investors to apply Occam’s razor principle. That is if you have two competing ideas to explain the same phenomenon, the simplest answer is probably right.
In this case, the simple answer is to look at what the data shows. And right now, that data is showing that the soft landing is more likely than not. You may disagree with that. I call it like I see it. What the data will say a month or three months from now may be completely different. But investing in this market requires you to be nimble. Here are three soft landing stocks to consider.
Walmart (WMT)
Source: fotomak / Shutterstock.com
When you’re looking for soft landing stocks, Walmart (NYSE:WMT) is a safe stock to start off your search. A soft landing may or may not lead to lower interest rates. With Walmart, lower interest rates aren’t your primary concern. The company hasn’t been immune from the impact of a weakening consumer. Still, revenue and earnings are positive year-over-year and analysts are forecasting high single-digit earnings growth over the next 12 months.
The company has been taking steps to have a larger omnichannel presence. The company’s buy online, pickup in-store (BOPUS) program is gaining momentum. And more importantly, the company is putting itself in a position to compete with Amazon (NASDAQ:AMZN) on more than just price.
Walmart stands to be a retail winner in the 2023 holiday season. Investors won’t get earnings results until February. But by that time, there may be more clarity as to the direction of the economy. At 22x forward earnings, the stock is reasonably valued.
D.R. Horton (DHI)
Source: Casimiro PT / Shutterstock.com
The surge in homebuilder stocks in 2023 has been a simple case of demand outpacing supply. The great relocation may be slowing down, but the transplants are still looking to plant roots in their new locations. D.R. Horton (NYSE:DHI) has been a standout performer.
The stock is up more than 65% for the year and recently made a new all-time high. There’s reason to believe that there could still be growth even if interest rates remain at their current level.
That being said, the stock is looking a little toppy. However, on December 13, DHI stock got a bullish price target increase from Barclays. The firm raised its target from $143 to $166.
One reason for the spike in D.R. Horton stock comes from the company’s solid fundamentals. Specifically, the company focuses on reducing the cycle times so they can turn homes faster and reduce their inventory levels. This allows them to align earnings per share (EPS) with cash flow more effectively.
Occidental Petroleum (OXY)
Source: T. Schneider / Shutterstock.com
Occidental Petroleum (NYSE:OXY) may seem like an odd candidate to appear with other soft-landing stocks. The conventional wisdom is that higher oil prices will signal the opposite of what the Federal Reserve is hoping for. It also tends to be negative for equities.
That may be true. However, some analysts believe that the yield on the 10-year Treasury bonds and the dollar will continue to weaken with or without rate cutting by the Federal Reserve. In that scenario, there’s room for oil prices to go higher without tanking the economy.
In that scenario, you’ll want oil stocks and Occidental is a good pick. OXY stock is at the lower end of its 52-week range.
In a year when many big oil companies are growing through acquisition, Occidental announced a deal to acquire CrownRock for $12 billion which will immediately improve the company’s free cash flow (FCF) accretion.
On the date of publication, Chris Markoch did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
Chris Markoch is a freelance financial copywriter who has been covering the market for over five years. He has been writing for InvestorPlace since 2019.
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The post 3 Stocks to Buy to Embrace a Soft Landing in 2024 appeared first on InvestorPlace.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
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2023-12-14
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WMT
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Below is Validea's guru fundamental report for WALMART INC (WMT). Of the 22 guru strategies we follow, WMT rates highest using our Multi-Factor Investor model based on the published strategy of Pim van Vliet. This multi-factor model seeks low volatility stocks that also have strong momentum and high net payout yields.
WALMART INC (WMT) is a large-cap growth stock in the Retail (Grocery) industry. The rating using this strategy is 87% based on the firm’s underlying fundamentals and the stock’s valuation. A score of 80% or above typically indicates that the strategy has some interest in the stock and a score above 90% typically indicates strong interest.
The following table summarizes whether the stock meets each of this strategy's tests. Not all criteria in the below table receive equal weighting or are independent, but the table provides a brief overview of the strong and weak points of the security in the context of the strategy's criteria.
MARKET CAP: PASS
STANDARD DEVIATION: PASS
TWELVE MINUS ONE MOMENTUM: NEUTRAL
NET PAYOUT YIELD: NEUTRAL
FINAL RANK: FAIL
Detailed Analysis of WALMART INC
WMT Guru Analysis
WMT Fundamental Analysis
More Information on Pim van Vliet
Pim van Vliet Portfolio
About Pim van Vliet: In investing, you typically need to take more risk to get more return. There is one major exception to this in the factor investing world, though. Low volatility stocks have been proven to outperform their high volatility counterparts, and do so with less risk. Pim van Vliet is the head of Conservative Equities at Robeco Asset Management. His research into conservative factor investing led to the creation of this strategy and the publication of the book "High Returns From Low Risk: A Remarkable Stock Market Paradox". Van Vliet holds a PhD in Financial and Business Economics from Erasmus University Rotterdam.
Additional Research Links
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Dividend Aristocrats 2023
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Top S&P 500 Stocks
Excess Returns Investing Podcast
About Validea: Validea is aninvestment researchservice that follows the published strategies of investment legends. Validea offers both stock analysis and model portfolios based on gurus who have outperformed the market over the long-term, including Warren Buffett, Benjamin Graham, Peter Lynch and Martin Zweig. For more information about Validea, click here
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
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2023-12-14
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InvestorPlace - Stock Market News, Stock Advice & Trading Tips
The list of companies that have stopped advertising on platform X (formerly known as Twitter) because Elon Musk endorsed an antisemitic post continues to grow. It’s become so long that you could construct an excellent portfolio from all the names abandoning the social media platform and its volatile billionaire owner.
Interestingly, most companies that have dropped ads from X use corporate speak to avoid calling Musk an outright racist, which remains debatable. I think he enjoys stirring the pot, much like Donald Trump. What these two men actually believe, I doubt anyone will ever know.
The latest large-cap stock to drop X was Walmart (NYSE:WMT), which dropped the platform from its advertising plan on Dec. 1.
“We aren’t advertising on X as we’ve found other platforms to better reach our customers,” a Walmart spokesperson said.
According to media reports, the number of brands bailing on X is more than 100. Here are three smart stock picks from the carnage Musk created by his lonesome.
Microsoft (MSFT)
Source: The Art of Pics / Shutterstock.com
According to The New York Times, Microsoft (NASDAQ:MSFT) pulling its ads from X could be worth more than $4 million in lost revenue to Musk. That might not seem like a lot, given the billionaire paid $44 billion for the platform formerly known as Twitter.
However, in 2022, X generated $4.4 billion in revenue, most of it from ads. At the end of November, the Times said the number of brands leaving the platform was more than 200. $2 million per advertiser is $400 million in lost revenue or about 10% of its annual sales.
X CEO Linda Yaccarino tried to convince customers Musk’s views on free speech were something to get behind. After what happened to Bud Light this past summer, there is no way any CEO is going anywhere near X. That would be career suicide.
“It doesn’t resonate at all,” Ruben Schreurs, the chief strategy officer at Ebiquity, a marketing and media consulting firm said, The Times reported. Schreurs added that the spending pauses seemed to be “turning into a termination of advertising on X.”
Only Musk’s sale of the platform will get these brands back.
As for Microsoft, there is no way it has any appetite for mixing it up with Elon Musk. After going through a stressful couple of weeks with OpenAI, it can find plenty of places to spend $4 million in ad revenue.
Netflix (NFLX)
Source: TY Lim / Shutterstock.com
According to The Times, Netflix (NASDAQ:NFLX), pulled $3 million in ads. The paper doesn’t specify over what period. However, assuming 90% of X’s $4.4 billion in 2022 revenue was for ads, daily ad spending on the platform exceeds an estimated $10.8 million.
The revenue damage becomes far more real annualized over a year. According to Statista, Netflix spent $1.59 billion in 2022 on advertising expenses. That was down slightly from $1.67 billion a year earlier. Since 2014, the most it’s ever spent was in 2019, when it dished out $1.88 billion.
If Netflix spent $3 million per week on X, which is hard to imagine, Elon Musk’s proverbial goose is undoubtedly cooked.
Even if $3 million per week were accurate, Netflix has ad-supported plans to grow. It can use the money not spent on X to reinvest in its ad business. To me, and probably to Netflix shareholders, that is a much better return on investment.
Elon’s loss is Netflix’s gain.
Airbnb (ABNB)
Source: Kaspars Grinvalds / Shutterstock
The last of the three is Airbnb (NASDAQ:ABNB). It’s reported to have pulled $1 million in ads from X.
The optics of a service such as Airbnb supporting the rantings of a madman would upset not only its users but also its hosts, which drive the company’s revenues. Airbnb doesn’t exist without its hosts. CEO and co-founder Brian Chesky knows this firsthand because he was the company’s first host.
Today, more than four million hosts provide over seven million listings in 220+ countries. Sure, you also have to have guests, but if they didn’t stay at an Airbnb, they’d stay at a hotel or resort or sleep in a tent at a campground. Inventory is critical to the business.
Interestingly, co-founder Joe Gebbia serves on Tesla’s (NASDAQ:TSLA) board, which he joined in 2022. That would be an awkward conversation at the next Tesla board meeting. Hopefully, Musk doesn’t use the exact words he did with Walt Disney (NYSE:DIS) CEO Bob Iger. At least, in Iger’s case, he wasn’t in the room.
Of these three names, Airbnb had the biggest reason to pull their ads. It isn’t an excellent look to support an alleged racist when you’re selling an inclusive type of experience.
I continue to like ABNB stock.
On the date of publication, Will Ashworth did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
Will Ashworth has written about investments full-time since 2008. Publications where he’s appeared include InvestorPlace, The Motley Fool Canada, Investopedia, Kiplinger, and several others in both the U.S. and Canada. He particularly enjoys creating model portfolios that stand the test of time. He lives in Halifax, Nova Scotia.
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The post 3 Smart Stock Picks in the Wake of Platform X’s Ad Exodus appeared first on InvestorPlace.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
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2023-12-13
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WMT
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In this podcast, Motley Fool analyst Bill Barker and host Deidre Woollard discuss:
The power of Chewy's auto-ship service.
If Chewy's growth is too dependent on macro trends.
What factors could lead to a Dollar General turnaround.
Motley Fool host Mary Long talks with Dexcom CEO Kevin Sayer about the impact of weight loss drugs on diabetes care.
To catch full episodes of all The Motley Fool's free podcasts, check out our podcast center. To get started investing, check out our quick-start guide to investing in stocks. A full transcript follows the video.
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This video was recorded on Dec. 07, 2023.
Deidre Woollard: Are you giving your pets gifts for the holidays? You're not alone. Motley Fool Money starts now. Welcome to Motley Fool Money. I'm Deidre Woollard here with Motley Fool Analyst Bill Barker. Bill, how's it going today?
Bill Barker: It's going well. Thanks.
Deidre Woollard: Glad to hear it. Well, yesterday on the show, Dylan and Bill Mann, I believe, talked about people's food. We're going to start with talking about pet food with Chewy earnings, so Bill, I got to ask you, I know you have pets. I believe you have a dog. Are you a Chewy subscriber?
Bill Barker: I've seen some people rave about their Chewy's experience, but I get food delivered regularly by Amazon and haven't ever given it a thought as to why would change.
Deidre Woollard: Do you have a subscription with Amazon, or do you just buy food when the bowl is empty?
Bill Barker: There's a subscription for some of the food and other parts of the food when the bowl is empty. One of the dogs is on prescription food right now, so I can't just get that as easily as otherwise. But it's a problem for Chewy is that there aren't enough people like me thinking about getting multiple dogs out there. They need more customers it seems like.
Deidre Woollard: I think so. Well, it's interesting because you get the subscription, but you get it through Amazon and Autoship is huge for Chewy two, it's about 76% of their business according to their earnings, and I find that interesting because I have a cat who's also on prescription food and also gets prescription medicine because he's itchy, and so we have Chewy for the medicine, but not for the food. The medicine is a big part of Chewy's business as well. Seems like a bigger part. But you're right, the earnings were, they weren't great. The customer count was down by 1% That's not great. This is a pandemic darling. But what impressed me was how much money everybody continues to spend, net sales of $543 per customer up year, every year by around 14%. They're trying to grow customers, but they also are trying to keep people spending some of that is the pharmacy part. But are they putting too much faith in how much we love our pets? I don't know if you've seen those commercials that she always been running, but they make it seem we are just ready to spend everything on our animals.
Bill Barker: I guess if they're betting on an increased trend in what is termed, in some places, pet humanization, then that's one way to go. They are going to run into a limit on that before running into a limit on the possibility of acquiring more customers pointed out that there was a COVID darling. I think a lot of the growth was pulled forward. There was an interpretation of the mass adoption of pets as something that was the beginning of extended period of the growth in the pet markets rather than just a pulling forward of future growth, and the stock price reflected that in 2021 and not ever since. This is a stock that's been globeredis. Reality has been delivered rather than the fantasy that was hoped for by not just owners of this stock, but a lot of others that saw changes in behavior over a short period rather than fundamental changes in behavior over a longer period.
Deidre Woollard: That is one of the things that I'm asking myself about, about this stock as well, this one, and the one we'll talk about later. Not a good year for either, but one of the things I mentioned on the call was really strong Black Friday and Cyber Monday. It's gone down now since then. But this thing about people buying pets gifts, do you buy your dogs gifts?
Bill Barker: No. There have been some impulse purchases at times, but I've been asked by the kids, it's so and so's birthday. What are you getting her? I just take the cat, the dog. They don't know anything about that. They just want a little more food. That's what they really want. But certainly the opportunity to buy costumes at Halloween for your pet, it doesn't seem to be a thing that the pets want. But a lot of these gifts are things that people want more than the pets want.
Deidre Woollard: Well, Chewy's betting on this idea of pet parents, or paw parents, depending on who you talk to. With this idea that your pet is family and you have to treat them like family, which I don't know. I love my cat, but I'm not sure I consider myself my cat's parent. Looking at Chewy tough here in the market, as we've mentioned, part of that losses, this is what the market really didn't like, and they're still a really young company. They're still growing. They're expanding into Canada. They're working on streamlining all of their shipping and things like that. I'm wondering, do you think the market has less tolerance for a company that isn't a tech company? Because losses seem to hurt more if you're not making software, from what I can tell.
Bill Barker: Well, if you're not growing that fast and you're losing money, that's a bad combination, always has been. You can defer the making money while the growth is exceptional. But when the growth becomes something that you could measure against lots and lots of other things, and ones that are making money, you suffer by comparison. When you depart the category of 20, 30% whatever it might be, annual growth, and you wander into high single digit, very low double digit, which is about as high as you might rationally predict for Chewy. At this point, the question turns to how does that stack up in terms of profits and poorly is the answer today.
Deidre Woollard: Badly yes.
Bill Barker: Then you're, well, who are the most likely buyers and owners of the stock? It's people who buy the story and either have just unshakable faith in management, or think there's a hiccup going on or something like that. But you're getting into fewer and fewer buyers just when you don't have either strong growth or any profitability. Now, there's future profitability, I suppose, in this company if it focuses on that. But it's still saying that it's a good growth story.
Deidre Woollard: That is the interesting thing is that it was maybe being seen as less of what it is, which is, e commerce, and seeing it more as some new type of company. The question I'm asking myself about it is, were the expectations too big? Because we've seen that with a lot of the pandemic darling is that they had growth, and we just thought, oh, the sky is the limit, and then we came back to reality. It's like maybe this is a smaller business than we thought. You mentioned earlier the idea of people need to be getting more pets. I mean, that's one of the issues that is happening. Adoption rates are down. We're not getting as many pets as we did when we were all home during the pandemic, and one of the things that I think about with this company is macro pressures. You've got the pressure of people probably will continue to spend on their pets, maybe spend a little less. You know, that's a concern. The other one that I think about which is off to the side, but the idea of household formation. My theory is if rents are more expensive, maybe people are living at home longer, maybe they're not going out and on their own and then maybe you won't get pets. With all of this stuff, is Chewy just a smaller business maybe than the market really wanted it to be?
Bill Barker: Certainly than what the market wanted it to be back when the stock was 5x6x. What it is today, the growth was understood to be a function of that real step up during the pandemic, and then just stretched out as people would maintain their pets and get more insurance for them, and the pets would age and they'd have more prescription medicine and everything, and there were many new pet owners and they would become lifelong pet owners. Well, some of that has played out. The pet market is bigger today than it was in 2019, but it's still digesting a lot of people that aren't going to turn out to be longer term or lifelong pet owners, or because they don't have the choice to work from home, can't maintain their pet the way they had or the way the pet wants to be cared for. There's continued digestion of the growth that occurred, and for a company that was in the high-growth category, that's a difficult thing to navigate.
Deidre Woollard: True. But the thing I do love about this is those auto ship numbers. I think that's a great thing to keep watching for this company, and as long as they keep having that and they keep growing spend, hopefully, they sort out some of the other stuff and learn to cut costs a little bit.
Bill Barker: People will continue to receive the food and then the food will continue to get eaten, and it is convenient to have the autoship like a subscription? It is a subscription, so that is a more stable source of revenue than otherwise. But as the numbers this quarter showed, that's not enough to produce the top line growth that the stock needed.
Deidre Woollard: I want to pivot and talk about another company that reported earnings which is Dollar General. It has not been a great year for them, either, not in the market or certainly in the court of public opinion. There was a Bloomberg cover story in September about Dollar General employees saying it's a terrible place to work. But I started getting interested in this one after that I read that story. Not a great look for them. But then they brought back their former CEO, Todd Bassos, in October. I'm starting to look at this one as a turnaround. One of the things that they announced, not on this call, but before that, was that they're investing $150 million in labor hours. They're focused more on the stores, on addressing some of those customer service problems. Some of the issues with shrink that they've had. In general, you've got a CEO coming back. How long do you give them, is it like a new CEO, where you say, it's got to be a full year. But if you've got a CEO coming back, they already know the company. Do you want to see action and results a little sooner?
Bill Barker: Yeah, well, I think one of the things that you're going to see, and you saw it perhaps already, is the big bath quarter where you put a lot of the bad stuff into your first quarter, maybe two quarters of results for the CEO. Some charges, assess what you can put into the past and put it into one big bundle and then start talking about the future. I think that certainly with a returning CEO, he's going to be much more tuned to exactly where the bodies are buried for this company and a very detailed knowledge of what does and doesn't work. Not only in the industry generally, but with the company specifically. It's not a function of a company that needs, I think, a new pair of eyes to look at it. An old pair of eyes had great success, left at the right time, perhaps. But you only have to go back a year to have the stock double the price that it was that it is today. Prior to the last 12 months, it was a fairly smooth 15 years for the company. I think that the odds in the market with markets betting on is a return to the past. That's a pretty good story for shareholders, whether it develops as you say. That's a question, how much time you should give. I would say just a couple of quarters, you'll see something.
Deidre Woollard: Yeah, I think what you just mentioned is why I'm interested in this one, because it was a good performers, it's a good dividends, it's been a good stock and then it's had this bad year. Now it seems maybe this is like their dominoes pizza moment where they admit that hey, there's a problem. But I think one of the things that's interesting for them, so not a great quarter, same store sales down a little bit. But they're putting a lot of their energy into growth. Maybe this is part of that, get all the cost stuff out of the way, because their real estate plans are ambitious, 800 new stores, about 1,500 remodels. You think sometimes as a CEO comes in, they want to trim costs, trims the sales. This is the opposite approach, and I'm wondering if that is because Dollar General, the Dollar stores, they have this captive audience. I think maybe they figure they increased, get more people in the stores, increase quality, maybe they increase sales. Is that something we should be looking at as part of the thesis here?
Bill Barker: Well, the growth here has to be put into context, 800 stores. I think they've got 15, 17,000 right now there.
Deidre Woollard: Yeah, they've got a lot of stores.
Bill Barker: I'll talk about the Dollar stores in general for the category there are 37,000. To put that into a bit of pointless context, you could visit one every day for 100 years and not have yet visited them all. If that were a worthwhile thing to do with your next 100 years, I've given you that idea. [laughs] There are plenty of them out there, 800 more isn't really as big a number as you might think given the installed store base already and the availability of them. But there are probably 800 reasonable locations. When you map that out over a few years. I think the remodeling is also a big part of this and I wouldn't doubt that there are, well, more than 1,500 stores that look like they could use a little remodeling out of the entire account. I think they've got plenty to do. They've got to get by these OSHA reports and the employee safety problems and fines that they have accumulated over the years and have been back in the news this year. You know what you're getting when you go into a Dollar General. But they can up the experience, if they choose to use their money that way. They've, I think, discontinued their share buybacks so they've got some more money available to dedicate to that. Up to a point which is up to the point at which the debt becomes a problem, because this is a company that has plenty of debt.
Deidre Woollard: Yeah, that's a good point. When you're assessing this as a potential, turnaround, there's just a lot of factors and I'm thinking about the Dollar stores in general, a lot lately because I'm thinking about shifting consumer behavior. What could be next? We've talked so much about consumer spending. I find it interesting looking at Dollar Tree versus Dollar General, because they're both Dollar stores, but you've got a different product mix. Dollar General is so much more tied to the grocery side of things. They're really are more in rural areas. Dollar Tree is starting to think like, OK, we're moving beyond the dollar, more expensive items. Dollar General, they're doing something different. They're putting in these DG markets. Dollar General markets, more fresh food. Looks like a grocery store, but like a very small grocery store. When you're thinking about Dollar General, what do you think about as, its role in the consumer spending cycle?
Bill Barker: I think more and more embedded with the consumables and the refrigerated installations. The food that has to be refrigerated, that they're selling. They're moving more toward consumer spending that does not change over time and is not particularly vulnerable to macroeconomic factors. People are going to come in frequently for their consumables, they're putting in more produce which will bring people in more often, because that's something you buy more frequently. I think it's a good plan to get people in more frequently, give them what they need most, and layer on some impulse purchases beyond that. It's very competitive. They don't have a mote. It's extremely easy wherever there's competition. Although in some rural communities are, they go to place in many others, of any greater population size, or growing population. There's going to be competition not just from Family Dollar, Dollar Tree or Walmart, slightly larger or significantly larger locations, but there's only so much you can capture before the online sales are also a threat. Their normal purchase is I think, less or around $15 per basket. That's not something that people are most frequently getting done online. How much they can grow that basket size without finding that they're running into competition from other and bigger players? I don't know. I think that's a bit of a cap. But everything up until about 12 months ago was generally successful for this company. They had, as I said, a good more than decade long, fairly smooth, story that people would love to see repeated.
Deidre Woollard: Well, I feel like both of the companies we talked about today are ones that we're going to want to see next quarter and because things have to go in a direction, at least. Thanks for your time today, Bill.
Bill Barker: Okay, thank you.
Deidre Woollard: If you're a regular Motley Fool money listener, you're probably well aware of how dividend stocks have the potential to really supercharge your portfolio's return. Dividends have accounted for around 40% of the total return of the S&P 500 since 1930. Of course, have been an important tool for all time greats like Benjamin Graham and Warren Buffett. Our top notch analysts at Motley Fool stock advisor certainly agree and have put together a list of five quality dividend payers that are also recommendations in our stock advisor service. The report is free to you just as a thank you for listening to our podcast. No purchase necessary. Just go to Fool.com slash dividends and we'll email it directly to your inbox. That's Fool.com slash dividends to claim your five dividend stock recommendations. Now we hear a lot about how weight loss drugs have the potential to upend more unexpected industries, airlines, gyms, apparel. But how are the leaders of medical device companies thinking about these new drugs? Up next, Mary Long talks with Kevin Sayer, CEO of Dexcom, about the future of diabetes care and the small monitor that's changing what that care looks like.
Mary Long: Maybe we can start by having you give us an overview of the history of diabetes care and how Dexcom came to really be a pioneer in continuous glucose monitoring.
Kevin Sayer: A great question. I personally go back in diabetes care back in the mid '90s. I started my time in diabetes at many med diabetes which Medtronic bought, and is there diabetes arm right now. With diabetes care, particularly those on insulin, there's always been several problems that need to be solved. Insulin was the first big one and what a great discovery that was then how's that insulin delivered? More importantly, what information do people use to manage their diabetes health and figure out how much insulin to deliver. Over time, the way people did that in the beginning was like urine sticks and then finger sticks where people would prick their finger and you would prick your finger and get a number and say, based on that, this is how much insulin I'm going to take or what I'm going to do, which is like watching a basketball game and looking at the score in the middle of the first quarter and deciding who's going to win, it doesn't work that way. I experienced the vision or the experience of continuous glucose monitoring way back in the '90s when I was there and then had the chance to come to Dexcom.
But quite honestly, the most difficult problem to solve an intensive insulin therapy is what is the information I'm going to base that decision on. What continuous glucose monitoring gives individuals is the opportunity to look at their glucose all the time. Our numbers go directly to your phone. We want to meet people where they are. They get a new glucose value every five minutes. Then we have alerts and alarms and system features that literally enabled them to be safe and more healthy than they would ever be without it. We've gone from a position, particularly with insulin users way back in the day. I've been in Dexcom now for 12 years full time. It took a long time to get somebody to get CGM to where now we're covered by all major insurance companies where the most affordable reimbursed solution there is for glucose monitoring. Most kids, if they get diagnosed with Type I diabetes now, or insulin, they leave with a Dexcom. They're not going through what everybody went through in the past. This has evolved to really become the standard of care there. We believe we have a lot more runway in other areas going forward.
Mary Long: That evolution that you mentioned, I've heard you say before that part of what Dexcom is and has been doing is really building an entirely new industry. Can you explain a bit what you might mean by that?
Kevin Sayer: Yeah and again, I'll go back to the beginning. In the beginning, insurance companies really didn't even want to pay for this because it looked like we're adding more costs to the system. We had to go create models to whereby we could get this reimbursed for people to use. We decided as a company that we wanted to take this technology to the phone. We were the first medical device of this nature, of this classification to go directly to a phone. When we went to a phone, all sorts of windows opened up because we enabled people to, for example, to share data with others. We rang the Nasdaq bell a couple of weeks ago and I talked to one of we had a lot of what we call our Dexcom warriors there, people who represent our company, who use our product. One was a young woman who told me a story. She's from Australia and she was asleep in a hotel room at 04:00 in the morning when people broke down her door because her blood glucose had gone low. Her friend in Australia had seen it because she followed the data on the phone, come by the hotel and saved her life. We've created situations and things of that nature to help people in their care. We've also created an industry with respect to interoperability. We share our data with other companies. We enable insulin pumps and algorithm companies to have automated insulin delivery to give people better lives. We share our data with apps with companies, nutrition based, diabetes care based, whatever. If our data can make somebody healthier, we want people to use our data where they can. Every first in our industry has been created by our company.
Mary Long: Dexcom is not the only company that makes a CGM device. Your chief rivals are Abbott, which makes the Freestyle Libre and Medtronic. Those are both large like diversified medical device companies. Dexcom, does Dexcom, end of story. How does that singular focus help you and hurt you?
Kevin Sayer: I consider it an asset primarily, but let me talk about how it helps us first, that singular focus means we have to be extremely clever and innovative. The list of first I came at you with earlier, going to the phone first, the first interoperate system and our level of accuracy and performance, the reimbursement we've obtained, we have to lead this industry. We can't follow the other guys. We've always prided ourselves on having the best product and that has given us a tremendous advantage over time with respect to accuracy and performance where it's difficult. The things I think about when I think about our competitors quite candidly infrastructure as we look at new geographies go into, for example, we don't have a cardiovascular business in Bulgaria, or pick a country, we have to very selectively pick where we're going to make investments and how we're going to grow international. These other geographies, because we don't have other businesses there. We have grown very methodically, very thoughtfully, very creatively, over time, internationally, and scaled our business that way. It's lack of infrastructure, but we've built it nicely. We've more than doubled the number of employees that we have in the past three years. For example, as we've built infrastructure out again while growing profitably.
Mary Long: The latest iteration generation of your CGM device is the G7, and that launched earlier this year. That rollout happened all around the world at the same time. Seems like that was a success. You raise end of your [laughs] guidance after posting your most recent results and are now targeting $3.575- 3.6 billion in revenue, which is about a 23-24% year over year growth. I'd imagine that there's a lot of planning that goes into that launch and also maybe a lot of chaos. What did you learn from that experience? Maybe what will you do differently when the G8 one day comes out?
Kevin Sayer: We've learned a lot of things. That's really a good question. Our G6 launch that happened five years earlier, we weren't ready for, we were literally running out of inventory almost on a monthly basis. If you ask my team. We were holding the business together. We're still growing well and we were doing fine. But it was really tough. We plan this launch much better from a supplier and a capacity perspective, and I've had no product shortages whatsoever. We also matured our development process enough to whereby we launched this product in a much more mature manner than other ones. You always have things you can improve when you launch your product. But I think the product was launched maturely and in a very good state. The other thing we learned is about our technology in general. People love our old product because it saves their life. It's been such an integral part of their care that while the other product is smaller and more accurate and reimbursed and affordable, there's emotional difficulty sometimes in switching for people. Because again, we've been front and center in their lives, people are switching out that are on the G6 system. Most of our G7 users are new to Dexcom. They're not G6 switchers. We've been able to access a lot more physicians as far as prescription, 18,000 more physicians in the US have written Dexcom scripts than had written scripts a year ago. Because the new product has so many great features with respect to a smaller size, it's ease of use. The new app is really strong and phenomenal. I think the launch has been very successful and with G8, I think what we've learned is we'll just apply those learnings. Let's make sure the product is ready. Let's make sure it's baked. Let's make sure we identify the features that people need to put into it. I think we did a very good job of identifying what our users we're going to want. Let's figure out what that next level of features is and build on that platform.
Mary Long: When you think about the future of Dexcom and future iterations of G7, G8, what have you? You seem to have a really close relationship with patients, with the custom consumers that use your products. How do you source feedback from them and then incorporate that into future iterations of this device?
Kevin Sayer: We continuously pulse our customers and ask for their feedback. We monitor social media very closely. The diabetes community is not quiet, they're pretty vocal. In fact, I got some great feedback when we were in New York ringing the bell. We had a dinner. We brought a lot of, again our Dexcom warriors back. We had a luncheon form. I sat at a table to get feedback from an eleven year old, a nine year old and a seven year old. And I said, OK, tell me what you would have us do better. It's really fun to ask the question and they all had really good answers. They want us to make the product last longer and we've committed to going from a end product to a fifteen day product over time. They talked about a couple things in the app they'd like to see. These kids, imagine being seven years old and having to manage taking shots every day or an insulin pump that's giving you insulin. When you ask a seven year old that question, you'd be shocked at the maturity of their answer. I'd like a different adhesive that does X, Y and Z. Okay, we can do that. We ask directly, pulse directly. We spend time with social media. Again, you talked about us being a regulated company. We also have to recognize that whatever we do is regulated and we have to make sure people are safe and it is a wind, we balance all of that.
Mary Long:Weight loss drugs have been a hot topic this year. There are plenty of bearers that are saying that this is going to change every industry, not just things that are seemingly related to weight loss drugs, but even airlines are going to change their entire set up. Perhaps unsurprisingly, part of that conversation has involved diabetes companies and companies just like yours. Yet again, you posted this amazing quarter most recently. I think even cited a study that says, well, actually use of these GLP-1, these weight loss drugs, supplements and increases use of CGM products. Can you talk a bit about how you see the future of weight loss drugs interacting with your product?
Kevin Sayer: Yeah and look, this drug category is amazing. The results that have been produced have been absolutely amazing. But there's never been a time when people wouldn't need CGM as a result of everything that's been learned. The thing that we talked about was data that we've garnered through very strong data sources. That people who go on these weight loss drugs, like people who have type two diabetes, who are on basal insulin, if you added GLP-1 to their therapy. If you add CGM, their outcomes are better. The outcomes of these people all get better if you add CGM to those therapies across the board, if they're on intensive insulin therapy, basal incent therapy or just somebody with type two diabetes and you add a GLP-1 to what they're already doing because it gives you a real time scorecard, you learn throughout the course of a day. For example, if you're on one of these weight loss drugs, look I can keep my glucose at a pretty steady state because I'm not eating as much. But you also learn very quickly, and a lot of us as executors of our company, we are sensors all the time without diabetes. You learn what specific meals do to your glucose and to your health. It definitely can create a better experience. It can also create better adherence to the drugs. One of the things the payers are concerned about in reimbursing for these drugs, are the patients going to comply? You can tell very quick from a CGM if somebody is complying, because you can see how steady their glucose is and how the spikes are not as big as they used to be before they were on these drugs. I think we can be a great scorecard for this. I think over time we can use the performance of our system combined with other data such as activity data, sleep data, whatever data we can incorporate into our data ecosystem and creating experience that can help people be healthier across the board. I never thought for a minute that these drugs would exclude TGM. I think we can become a vital part of it. We just have to define that, just like we've defined our place in the insulin-using world. Now, Basil's insulin. We'll define our place in this one too and I think we'll do very well.
Mary Long: This takes this a step further. But our co founder David Gardner talks a lot about the importance of investing in companies that are building the future you'd like to see. In so many ways, right, Dexcom is building a better future. But ultimately, CGM devices manage diabetes rather than cure or eliminate it. So how does Dexcom fit into this futuristic world in which maybe diabetes doesn't exist?
Kevin Sayer: Well, type 1 diabetes isn't going to be affected by these drugs. There could be a cure some day. There are many programs where people are trying to get cures and that would be a tremendous outcome for everybody. Let's be very clear, but at the end of all this, you're going to need a scorecard and people are going to need to see how healthy they are. Even again, if type 2 diabetes is delayed, you learn so much from wearing a CGM. You learn more from wearing a CGM about your metabolic health than almost anything you can do. We believe we can create experiences that fit right along with all of this and as somebody has pre diabetes or for example, gestational diabetes. We had a label, we can now be used in pregnancy. Well, I have grand babies that had a gestational diabetes, I have a gestational diabetes daughter in law, and she was sticking her finger for the first couple of weeks, she called me up, can you give me one of those? It made nine day difference and my twin grand babies are here largely came when they needed to come because she wore a sensor. We have a place across this healthcare spectrum and glucose state is going to be important enough that we'll figure out where to get it in. I think this noise will eventually quiet down and will be an important part of this community.
Deidre Woollard: As always, people on the program may have interest in the stocks they talk about, and the Motley Fool may have formal recommendations for or against, so don't buy or sell stocks based solely on what you hear. I'm Deidre Woollard, thanks for listening. We'll see you tomorrow.
John Mackey, former CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool’s board of directors. Bill Barker has no position in any of the stocks mentioned. Deidre Woollard has positions in Amazon.com, Dollar General, and Walmart. Mary Long has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Amazon, Chewy, and Walmart. The Motley Fool recommends DexCom. The Motley Fool has a disclosure policy.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
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2023-12-13
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WMT
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(RTTNews) - Sam's Club, a division of Walmart Inc. (WMT) and a leading membership warehouse club, announced Wednesday plans to reopen its Grapevine, Texas, location in late 2024, after closure due to significant storm damage in December 2022.
The revitalized club, situated at 1701 W State Hwy 114, will not only restore convenience to its members but also bring new jobs, innovative services, and a renewed commitment to the Grapevine community.
Following extensive renovations, Sam's Club is eager to reintroduce an enhanced shopping experience to its valued members.
This initiative will generate new jobs within the Grapevine community, contributing to the overall economic growth and providing valuable career opportunities for local residents.
As part of its reopening announcement, Sam's Club will be providing $30,000 through a grant and in-kind charitable donations to support the Grapevine Relief and Community Exchange (GRACE), further strengthening its ties with the Grapevine community.
In celebration, Sam's Club is offering the Dallas/Fort Worth market an exclusive discount on new memberships. Potential members can join as a Plus member and get $50 off your next in-club purchase of $50 or more or join as a club member and get $30 off your next in-club purchase of $30 or more. These offers are exclusively available at Dallas/Fort Worth Sam's Clubs and are not redeemable in other markets.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
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2023-12-13
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WMT
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Below is Validea's guru fundamental report for WALMART INC (WMT). Of the 22 guru strategies we follow, WMT rates highest using our Multi-Factor Investor model based on the published strategy of Pim van Vliet. This multi-factor model seeks low volatility stocks that also have strong momentum and high net payout yields.
WALMART INC (WMT) is a large-cap growth stock in the Retail (Grocery) industry. The rating using this strategy is 87% based on the firm’s underlying fundamentals and the stock’s valuation. A score of 80% or above typically indicates that the strategy has some interest in the stock and a score above 90% typically indicates strong interest.
The following table summarizes whether the stock meets each of this strategy's tests. Not all criteria in the below table receive equal weighting or are independent, but the table provides a brief overview of the strong and weak points of the security in the context of the strategy's criteria.
MARKET CAP: PASS
STANDARD DEVIATION: PASS
TWELVE MINUS ONE MOMENTUM: NEUTRAL
NET PAYOUT YIELD: NEUTRAL
FINAL RANK: FAIL
Detailed Analysis of WALMART INC
WMT Guru Analysis
WMT Fundamental Analysis
More Information on Pim van Vliet
Pim van Vliet Portfolio
About Pim van Vliet: In investing, you typically need to take more risk to get more return. There is one major exception to this in the factor investing world, though. Low volatility stocks have been proven to outperform their high volatility counterparts, and do so with less risk. Pim van Vliet is the head of Conservative Equities at Robeco Asset Management. His research into conservative factor investing led to the creation of this strategy and the publication of the book "High Returns From Low Risk: A Remarkable Stock Market Paradox". Van Vliet holds a PhD in Financial and Business Economics from Erasmus University Rotterdam.
Additional Research Links
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About Validea: Validea is aninvestment researchservice that follows the published strategies of investment legends. Validea offers both stock analysis and model portfolios based on gurus who have outperformed the market over the long-term, including Warren Buffett, Benjamin Graham, Peter Lynch and Martin Zweig. For more information about Validea, click here
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
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2023-12-13
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WMT
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Walmart Inc. (NYSE: WMT) is big, to say the least. It is the largest retailer in the world. It's the largest importer of goods in the United States. It is one of the largest consumer discretionary sector companies fiercely competing with Amazon.com Inc. (NASDAQ: AMZN). A strong dollar is a friend to Walmart as it imports goods cheaper and sells for a larger profit in the United States. Walmart is the largest employer in the United States, with 1.6 million workers, and the fourth largest in the world, with 2.3 million global workers. Some might say Walmart falls into the category of "too big to fail ."However, after its recent earnings reaction, investors may be wondering if Walmart has grown too big to prevail.
Window dressing accentuates the divergence.
While competitors like Target Co. (NYSE: TGT) experienced an 11% price gap that grew to a 21% gain in the following days, Walmart shares gapped down 4.8% on its fiscal Q3 2024 earnings release and proceeded to sell off 10% in the following days despite the S&P 500 index hitting yearly highs. This stark negative correlation is rare as these two retailers tend to move together in lockstep. However, this time of the year can cause portfolio managers to frantically dump the losers and buy the winners in the final window dressing period of the year. It’s worth noting that WMT shares are still up 5% year-to-date (YTD) compared to TGT shares trading down 10.9% YTD. Check out the sector heatmap on MarketBeat.
Growth is slowing but still growing.
On Nov. 16, 2023, Walmart released its fiscal third-quarter 2024 results for the quarter ending October 2023. The company reported an earnings-per-share (EPS) profit of $1.53 versus consensus analyst estimates for a profit of $1.52, a penny beat. Revenues climbed 5.2% YoY to $160.8 billion, beating analyst estimates of $159.65 billion. Consolidated gross margins rose 32 bps.
Comparable sales and e-commerce growth
U.S. comparable sales rose 4.9%, led by grocery and health wellness products. E-commerce spiked 24%, led by pickup and delivery. General merchandise grew low single-digit, reflecting softness in discretionary categories like apparel, home and toys. While unseasonal weather caused November sales to go up, Walmart expects sales growth to moderate in Q4 as grocery inflation normalizes to historic levels. Sam's Club U.S. comp sales without fuel rose 3.2%, and e-commerce rose 16% YoY.
Raised guidance still below analyst expectations
Walmart expects fiscal full-year 2024 EPS of $6.40 to $6.48, up from previous guidance of $6.36 to $6.46 but still shy of the $6.50 consensus analyst estimates. Fiscal full-year 2024 revenues are expected to rise 5% to 5.5%, up from 4% to 4.5% in previous estimates or $641.6 billion to $644.6 billion versus $642.43 billion.
Deflation will pressure the company.
Walmart CEO Doug McMillon noted that inflation is starting to fall for some grocery items, including chicken, seafood and dairy, but not so much with dry grocery. General merchandise prices are also falling, causing retailers to roll back prices. Consumers will benefit from the effects of deflation, which will put more pressure on the company to sell more products. McMillon stated, "In the U.S., we may be managing through a period of deflation in the months to come, and while that would put more unit pressure on us, we welcome it because it's better for our customers.” Investors didn't like this comment and reacted by selling.
Insights on consumers
CEO McMillon made many points in a CNBC interview following the earnings release. He emphasized that consumers are price-sensitive right now. Even richer consumers are shopping at Walmart for value. Foot traffic has increased with faster growth for curbside delivery. General merchandise is starting to experience price deflation. Next year could be a deflationary environment, but the company is not bracing for a recession and still expects growth in 2024.
Walmart analyst ratings and price targets are at MarketBeat. Walmart peers and competitor stocks can be found with the MarketBeat stock screener.
Daily ascending price channel breakdown
The daily candlestick chart for WMT illustrates the ascending price channel heading into the earnings as shares hit 52-week highs on the heels of Target's strong earning reaction. However, the sentiment reversed quickly upon the release as shares gapped down nearly 5% and proceeded to continue selling off 10% through the daily 200-period moving average support at $153.63. The daily market structure low (MSL) trigger formed at $155.27 but could not trigger. The daily relative strength index (RSI) plunged from the 70-band towards the 30-band. Pullback support levels are at $150.24, $145.50, $141.84 and $138.00.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
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2023-12-13
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WMT
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By Nick Carey and Paul Lienert
LONDON/DETROIT, Dec 13 (Reuters) - Electric vehicle charging companies in Europe and the U.S. have started fighting over the best spots for fast public chargers, and industry watchers predict fresh rounds of consolidation as more big investors enter the fray.
Many current EV charger companies are backed by long-term investors, and more are expected to launch. Looming bans in various countries on cars powered by fossil fuels have made the sector more attractive to infrastructure investors like M&G's MNG.L Infracapital and Sweden's EQT.
"If you look at our customers, it's like a land grabbing game now," Tomi Ristimaki, CEO of Finnish EV charger manufacturer Kempower KEMPOWR.HE said. "Who gets the best locations now can guarantee electricity sales in the coming years."
A Reuters analysis showed there are more than 900 EV charging companies globally. The sector has attracted over $12 billion in venture capital funding since 2012, according to PitchBook.
As big investors fund more consolidation, "the fast-charging landscape will look pretty different from the landscape that exists today," said Michael Hughes, chief revenue and commercial officer for ChargePoint CHPT.N, one of the largest suppliers of EV charging equipment and software.
Corporations from Volkswagen VOWG_p.DE to BP BP.L and E.ON EONGn.DE have invested heavily in the industry, which has seen 85 acquisitions since 2017.
See graphic: https://tmsnrt.rs/3QJRvKz
There are more than 30 fast-charger operators in the UK alone. Two new ones launched last month: Australia’s Jolt, backed by BlackRock's infrastructure fund, and Zapgo, which has received 25 million pounds ($31.4 million) in funding from Canadian pension fund OPTrust.
In the U.S. market, Tesla TSLA.O is the biggest player, but more convenience stores and fuel stations will soon join the fray and the number of U.S. fast-charging networks will more than double to 54 in 2030 from 25 in 2022, said Loren McDonald, CEO of San Francisco-based research firm EVAdoption.
See graphic: https://tmsnrt.rs/3we1njJ
It can take four years for a properly placed EV charging station to become profitable once utilization hits around 15%. Charger companies complain red tape in Europe is slowing expansion. Still, the sector is viewed as a good bet by long-term infrastructure investors like Infracapital, which owns Norway's Recharge and has invested in Britain's Gridserve.
"With the right locations, long-term investments in (charging companies) absolutely make sense," said Christophe Bordes, managing director at Infracapital.
ChargePoint's Hughes believes larger players will start looking beyond existing sites for new real estate, purpose-built for mega-facilities with 20 or 30 fast-charge dispensers, surrounded by retailers and amenities.
"There's a race for space," he said, "but it will take longer than anybody expects to find, build and enable these new sites for the next generation of fast charging."
Competition for the best sites is becoming fierce and site hosts can switch between operators before settling on a winner.
"We like to say there's no such thing as a dead deal when you're talking to a site host," Blink Charging BLNK.O CEO Brendan Jones said.
"LOGOS WILL BE DIFFERENT"
Firms are also competing for exclusive contracts with hosts.
For instance, UK's InstaVolt - owned by EQT - has deals with companies like McDonald's MCD.N to build charging stations at their locations.
"If you can win that partnership, it's yours until you blow it," InstaVolt CEO Adrian Keen said.
With EQT's "deeper pockets," InstaVolt plans 10,000 chargers in the UK by 2030, has active chargers in Iceland, and has launched operations in Spain and Portugal, Keen said. Consolidation could start in the next year or so, he added.
"That might open up opportunities in the markets we're in, but also open the door to a new market for us," Keen said.
Utility EnBW's EBKG.DE charging unit has 3,500 EV charge points in Germany, about 20% of that market. It is investing 200 million euros ($215 million) annually to hit 30,000 charging points by 2030, leaning on local staff to fend off competition for sites.
The unit has also formed charging network partnerships in Austria, the Czech Republic and northern Italy, vice president of sales Lars Walch said.
While consolidation is coming, there will still be room for multiple operators, Walch said.
Norway, a leading EV market, has suffered from short-term "over-deployment" this year as companies raced to build out charging stations, Recharge CEO Hakon Vist said. The market added 2,000 new charge points to hit a total of 7,200, but EV sales were down 2.7% through October this year.
Recharge has around 20% market share in Norway, just behind Tesla.
"Some companies will find they're too small to meet customers' requirements and leave or sell," Vist said.
Others are launching companies knowing they could acquire others or be acquired themselves.
New UK entrant, OPTrust-backed Zapgo plans to target under-served parts of England's Southwest, offering landlords a slice of charging revenue to get good locations. It plans 4,000 chargers by 2030, said CEO Steve Leighton, who predicted consolidation "will all come down to money" later this decade.
"The funders who've got the deepest pockets will be running that consolidation," Leighton said, adding OPTrust "is big, but one of the larger infrastructure funds might come along and want to pick Zapgo up at some point."
The U.S. market will shift as convenience store chains like Circle K and Pilot Company, and retail giants like Walmart WMT.N invest massively in charging stations, EVAdoption's McDonald said.
"Like all industries started by a bunch of small startups, over time the big guys jump in and ... they consolidate," McDonald said. "At the end of this decade, the logos are going to be very different."
($1 = 0.9307 euros)
($1 = 0.7967 pounds)
Electric Vehicle Fast Charging Networks Electric Vehicle Fast Charging Networks https://tmsnrt.rs/3R00Mwk
Venture investment in EV charging startups Venture investment in EV charging startups https://tmsnrt.rs/3QObzvb
(Reporting By Nick Carey and Paul Lienert, editing by Ben Klayman and David Gregorio)
((nick.carey@thomsonreuters.com; +44 7385 414 954;))
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
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2023-12-12
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WMT
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By Abigail Summerville
NEW YORK, Dec 12 (Reuters) - Six U.S. lawmakers wrote to the Federal Trade Commission (FTC) on Monday expressing their opposition to the proposed $24.6-billion acquisition of grocery chain operator Albertsons by peer Kroger Co KR.N, according to a letter reviewed by Reuters.
Kroger and Albertsons have said they expect to complete their merger by early 2024, once the FTC completes its antitrust review.
Senators Elizabeth Warren, Mazie Hirono, Bernie Sanders and Cory Booker and representatives Summer Lee and Alexandria Ocasio-Cortez said in the letter that Kroger's proposal to divest 413 stores to C&S Wholesale Grocers would not address harms to consumers, workers, and the grocery industry if the merger is allowed.
The lawmakers are arguing that store divestitures as a remedy to mega mergers often fail to maintain competitive conditions, because companies have an incentive to ensure that the businesses they spin off do not succeed.
C&S, which secured financial backing from SoftBank Group Corp 9984.T for its deal with Kroger, operates primarily as a supplier rather than a grocery-store operator. It currently has around two dozen stores under the Grand Union and Piggly Wiggly brands.
Other lawmakers, including congressmen Greg Landsman, Brian Fitzpatrick and Josh Gottheimer have sent letters to the FTC in support of the deal.
Kroger and Albertsons have said the deal will allow them to better compete with large, non-union players and achieve lower prices. Kroger also said that it will not close any stores, distribution centers or manufacturing facilities or lay off any frontline associates as a result of the merger.
The FTC declined to comment. Kroger and Albertsons did not immediately respond to requests for comment.
(Reporting by Abigail Summerville in New York; Editing by Sharon Singleton)
((abigail.summerville@thomsonreuters.com;))
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
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2023-12-12
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WMT
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By Abigail Summerville
NEW YORK, Dec 12 (Reuters) - Six U.S. lawmakers wrote to the Federal Trade Commission (FTC) on Monday expressing their opposition to the proposed $24.6-billion acquisition of grocery chain operator Albertsons by peer Kroger Co KR.N, according to a letter reviewed by Reuters.
Kroger and Albertsons have said they expect to complete their merger by early 2024, once the FTC completes its antitrust review.
Senators Elizabeth Warren, Mazie Hirono, Bernie Sanders and Cory Booker and representatives Summer Lee and Alexandria Ocasio-Cortez said in the letter that Kroger's proposal to divest 413 stores to C&S Wholesale Grocers would not address harms to consumers, workers, and the grocery industry if the merger is allowed.
The lawmakers are arguing that store divestitures as a remedy to mega mergers often fail to maintain competitive conditions, because companies have an incentive to ensure that the businesses they spin off do not succeed.
C&S, which secured financial backing from SoftBank Group Corp 9984.T for its deal with Kroger, operates primarily as a supplier rather than a grocery-store operator. It currently has around two dozen stores under the Grand Union and Piggly Wiggly brands.
Other lawmakers, including congressmen Greg Landsman, Brian Fitzpatrick and Josh Gottheimer have sent letters to the FTC in support of the deal.
“Albertsons Cos. merging with Kroger will expand competition, lower prices, protect union jobs, and enhance customers’ shopping experience,” a representative for Albertsons said in a statement.
The only parties that would benefit if the deal is blocked would be Amazon, Walmart and other large, non-union retailers, whereas a combined Kroger and Albertsons would ensure that neighborhood supermarkets can better compete with these retailing giants, the representative continued.
Kroger has said that it will not close any stores, distribution centers or manufacturing facilities or lay off any frontline associates as a result of the merger.
(Reporting by Abigail Summerville in New York; Editing by Sharon Singleton and Franklin Paul)
((abigail.summerville@thomsonreuters.com;))
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
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2023-12-12
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WMT
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Below is Validea's guru fundamental report for WALMART INC (WMT). Of the 22 guru strategies we follow, WMT rates highest using our Multi-Factor Investor model based on the published strategy of Pim van Vliet. This multi-factor model seeks low volatility stocks that also have strong momentum and high net payout yields.
WALMART INC (WMT) is a large-cap growth stock in the Retail (Grocery) industry. The rating using this strategy is 87% based on the firm’s underlying fundamentals and the stock’s valuation. A score of 80% or above typically indicates that the strategy has some interest in the stock and a score above 90% typically indicates strong interest.
The following table summarizes whether the stock meets each of this strategy's tests. Not all criteria in the below table receive equal weighting or are independent, but the table provides a brief overview of the strong and weak points of the security in the context of the strategy's criteria.
MARKET CAP: PASS
STANDARD DEVIATION: PASS
TWELVE MINUS ONE MOMENTUM: NEUTRAL
NET PAYOUT YIELD: NEUTRAL
FINAL RANK: FAIL
Detailed Analysis of WALMART INC
WMT Guru Analysis
WMT Fundamental Analysis
More Information on Pim van Vliet
Pim van Vliet Portfolio
About Pim van Vliet: In investing, you typically need to take more risk to get more return. There is one major exception to this in the factor investing world, though. Low volatility stocks have been proven to outperform their high volatility counterparts, and do so with less risk. Pim van Vliet is the head of Conservative Equities at Robeco Asset Management. His research into conservative factor investing led to the creation of this strategy and the publication of the book "High Returns From Low Risk: A Remarkable Stock Market Paradox". Van Vliet holds a PhD in Financial and Business Economics from Erasmus University Rotterdam.
Additional Research Links
Top NASDAQ 100 Stocks
Factor-Based ETF Portfolios
Harry Browne Permanent Portfolio
Ray Dalio All Weather Portfolio
High Shareholder Yield Stocks
About Validea: Validea is aninvestment researchservice that follows the published strategies of investment legends. Validea offers both stock analysis and model portfolios based on gurus who have outperformed the market over the long-term, including Warren Buffett, Benjamin Graham, Peter Lynch and Martin Zweig. For more information about Validea, click here
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
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2023-12-11
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WMT
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To become a "Dividend Aristocrat," a dividend paying company must accomplish an incredible feat: consistently increase shareholder dividends every year for at least 20 consecutive years. Companies with this kind of track record tend to attract a lot of investor attention — and furthermore, "tracking" funds that follow the Dividend Aristocrats Index must own them. With all of this demand for shares, dividend growth stocks can sometimes become "fully priced," where there isn't much upside to analyst targets.
But we here at ETF Channel have looked through the underlying holdings of the SPDR S&P Dividend ETF (which tracks the S&P High Yield Dividend Aristocrats Index), and found these five dividend growth stocks that actually still have fairly substantial upside to the average analyst target price 12 months out. Which means, if the analysts are correct, these are five dividend growth stocks that could produce capital gains in addition to their growing dividend payments.
In the first table below, we present the five stocks. The recent share price, average analyst 12-month target price, and percentage upside to reach the analyst target are presented.
STOCK RECENT PRICE AVG. ANALYST 12-MO. TARGET % UPSIDE TO TARGET
Albemarle Corp. (Symbol: ALB) $124.51 $196.59 57.89%
Exxon Mobil Corp (Symbol: XOM) $99.17 $129.00 30.07%
Walmart Inc (Symbol: WMT) $150.13 $180.02 19.91%
Brown-Forman Corp (Symbol: BF.B) $55.70 $65.86 18.25%
Procter & Gamble Company (Symbol: PG) $145.16 $167.06 15.08%
The average 12-month analyst targets are only targets for the share price however, and each of these stocks are expected to pay dividends during that holding period — so the expected total return if these stocks reach their analyst targets is actually the share price upside seen by the analysts plus the dividend yield shareholders can expect. To ballpark that total return potential, we have added the current yield to the analyst target price upside, in order to arrive at the 12-month total return potential:
STOCK DIVIDEND YIELD % UPSIDE TO ANALYST TARGET IMPLIED TOTAL RETURN POTENTIAL
Albemarle Corp. (Symbol: ALB) 1.29% 57.89% 59.18%
Exxon Mobil Corp (Symbol: XOM) 3.83% 30.07% 33.9%
Walmart Inc (Symbol: WMT) 1.52% 19.91% 21.43%
Brown-Forman Corp (Symbol: BF.B) 1.56% 18.25% 19.81%
Procter & Gamble Company (Symbol: PG) 2.59% 15.08% 17.67%
Another consideration with dividend growth stocks is just how much the dividend is growing. We looked up the trailing twelve months worth of dividends shareholders of each of the above five companies have collected, and then also looked up the same number for the prior trailing twelve months. This gives us a rough yardstick to see how much the dividend has grown, from one trailing twelve month period to another.
STOCK PRIOR TTM DIVIDEND TTM DIVIDEND % GROWTH
Albemarle Corp. (Symbol: ALB) $1.575 $1.595 1.27%
Exxon Mobil Corp (Symbol: XOM) $3.55 $3.68 3.66%
Walmart Inc (Symbol: WMT) $2.24 $2.28 1.79%
Brown-Forman Corp (Symbol: BF.B) $0.773 $0.836 8.15%
Procter & Gamble Company (Symbol: PG) $3.609 $3.736 3.52%
These five stocks are part of our full Dividend Aristocrats List. The average analyst target price data upon which this article was based, is courtesy of data provided by Zacks Investment Research via Quandl.com.
Get the latest Zacks research report on BF.B — FREE
Get the latest Zacks research report on PG — FREE
Dividend Growth Stocks: 25 Aristocrats »
Also see:
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Funds Holding JPEF
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
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2023-12-11
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WMT
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InvestorPlace - Stock Market News, Stock Advice & Trading Tips
If the American consumer is resilient in 2023, which stock should you buy? You’re probably thinking of Amazon (NASDAQ:AMZN) or Walmart (NYSE:WMT). Yet, there’s an under-the-radar pick that’s worth your attention and investable capital. I invite you to take a closer look at eBay (NASDAQ:EBAY) stock today, especially if you have a contrarian streak.
Sure, it requires courage to risk your money on an unloved company like eBay. However, if you’re serious about buying low and selling higher, then you’ll have to look outside of the “Magnificent Seven” market darlings. With that in mind, let’s see if eBay checks the necessary boxes for selective investors.
A Famous TV Personality Says EBAY Stock Is ‘Done’
I not among the group of “Cramer fader” traders who purposely do the opposite of everything that Mad Money host Jim Cramer recommends. However, I strongly disagree with Cramer’s stance on eBay.
Prior to Black Friday and Cyber Monday, Cramer declared that EBAY stock is “done” (or more precisely, that he’s “done” with eBay). As a contrarian, I start to get interested when commentators throw in the towel on a particular asset.
Was it reasonable for Cramer to (per TheStreet) cite “weak consumer demand” as a reason to be “done” with eBay? Data from Adobe Analytics seems to contradict Cramer’s concern about the U.S. consumer.
Reportedly, American consumers spent a whopping $9.8 billion online on Black Friday this year. That’s up 7.5% year over year. U.S. consumers spent $12.4 billion online on Cyber Monday, up 9.6% year over year.
Amazon’s top line will certainly benefit from this, but why shouldn’t it bode well for eBay, too? And frankly, despite Cramer’s declaration, I’m just not seeing “weak consumer demand.”
eBay’s Value-and-Yield Combo
Besides, even prior to Black Friday and Cyber Monday, eBay wasn’t in any real trouble. The company’s third-quarter 2023 GAAP net revenue grew 5% year over year, which is not spectacular, but not too bad. More impressively, eBay’s GAAP earnings flipped from a 13-cent loss per diluted share in the year-earlier quarter to income (not a loss) of $2.46 per diluted share in Q3 2023.
Moreover, eBay appears to be relatively underpriced or at least reasonably priced. Notably, eBay’s GAAP-measured trailing 12-month price-to-earnings ratio of 8.27x is roughly half of the sector median P/E ratio of 16.47x.
On top of all that, eBay pays a forward annual dividend yield of 2.4%. This ought to appeal to passive income investors, as the consumer cyclical sector average dividend yield is around 1%. Hence, eBay offers a powerful combination of value and yield, just in time for the December holidays.
EBAY Stock: Ignore the ‘FUD’
All of this just goes to show that when stocks trade near their 52-week lows, some commentators become wary while others see opportunities. Instead of succumbing to the “FUD” (fear, uncertainty and doubt), you can conduct your due diligence on eBay.
With all due respect to Cramer, I’m not “done” with EBAY stock, not even close. The American consumer appears to be quite resilient now, and eBay’s quarterly results weren’t bad at all. Consequently, for a compelling value-and-yield holiday-season combo, consider a share position in eBay today.
On the date of publication, David Moadel did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
David Moadel has provided compelling content – and crossed the occasional line – on behalf of Motley Fool, Crush the Street, Market Realist, TalkMarkets, TipRanks, Benzinga, and (of course) InvestorPlace.com. He also serves as the chief analyst and market researcher for Portfolio Wealth Global and hosts the popular financial YouTube channel Looking at the Markets.
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The post eBay Stock: A December Stocking Stuffer You Must Not Ignore appeared first on InvestorPlace.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
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2023-12-10
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WMT
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Below is Validea's guru fundamental report for WALMART INC (WMT). Of the 22 guru strategies we follow, WMT rates highest using our Multi-Factor Investor model based on the published strategy of Pim van Vliet. This multi-factor model seeks low volatility stocks that also have strong momentum and high net payout yields.
WALMART INC (WMT) is a large-cap growth stock in the Retail (Grocery) industry. The rating using this strategy is 87% based on the firm’s underlying fundamentals and the stock’s valuation. A score of 80% or above typically indicates that the strategy has some interest in the stock and a score above 90% typically indicates strong interest.
The following table summarizes whether the stock meets each of this strategy's tests. Not all criteria in the below table receive equal weighting or are independent, but the table provides a brief overview of the strong and weak points of the security in the context of the strategy's criteria.
MARKET CAP: PASS
STANDARD DEVIATION: PASS
TWELVE MINUS ONE MOMENTUM: NEUTRAL
NET PAYOUT YIELD: NEUTRAL
FINAL RANK: FAIL
Detailed Analysis of WALMART INC
WMT Guru Analysis
WMT Fundamental Analysis
More Information on Pim van Vliet
Pim van Vliet Portfolio
About Pim van Vliet: In investing, you typically need to take more risk to get more return. There is one major exception to this in the factor investing world, though. Low volatility stocks have been proven to outperform their high volatility counterparts, and do so with less risk. Pim van Vliet is the head of Conservative Equities at Robeco Asset Management. His research into conservative factor investing led to the creation of this strategy and the publication of the book "High Returns From Low Risk: A Remarkable Stock Market Paradox". Van Vliet holds a PhD in Financial and Business Economics from Erasmus University Rotterdam.
Additional Research Links
Top NASDAQ 100 Stocks
Factor-Based ETF Portfolios
Harry Browne Permanent Portfolio
Ray Dalio All Weather Portfolio
High Shareholder Yield Stocks
About Validea: Validea is aninvestment researchservice that follows the published strategies of investment legends. Validea offers both stock analysis and model portfolios based on gurus who have outperformed the market over the long-term, including Warren Buffett, Benjamin Graham, Peter Lynch and Martin Zweig. For more information about Validea, click here
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
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2023-12-08
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WMT
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Looking today at week-over-week shares outstanding changes among the universe of ETFs covered at ETF Channel, one standout is the SPDR Portfolio S&P 500 Value ETF (Symbol: SPYV) where we have detected an approximate $828.3 million dollar inflow -- that's a 4.6% increase week over week in outstanding units (from 404,200,000 to 422,750,000). Among the largest underlying components of SPYV, in trading today Berkshire Hathaway Inc New (Symbol: BRK.B) is off about 0.2%, Salesforce Inc (Symbol: CRM) is up about 0.7%, and Walmart Inc (Symbol: WMT) is lower by about 0.5%. For a complete list of holdings, visit the SPYV Holdings page » The chart below shows the one year price performance of SPYV, versus its 200 day moving average:
Looking at the chart above, SPYV's low point in its 52 week range is $37.925 per share, with $44.91 as the 52 week high point — that compares with a last trade of $44.82. Comparing the most recent share price to the 200 day moving average can also be a useful technical analysis technique -- learn more about the 200 day moving average ».
Exchange traded funds (ETFs) trade just like stocks, but instead of ''shares'' investors are actually buying and selling ''units''. These ''units'' can be traded back and forth just like stocks, but can also be created or destroyed to accommodate investor demand. Each week we monitor the week-over-week change in shares outstanding data, to keep a lookout for those ETFs experiencing notable inflows (many new units created) or outflows (many old units destroyed). Creation of new units will mean the underlying holdings of the ETF need to be purchased, while destruction of units involves selling underlying holdings, so large flows can also impact the individual components held within ETFs.
Click here to find out which 9 other ETFs had notable inflows »
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APGN shares outstanding history
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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
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2023-12-08
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WMT
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Below is Validea's guru fundamental report for WALMART INC (WMT). Of the 22 guru strategies we follow, WMT rates highest using our Multi-Factor Investor model based on the published strategy of Pim van Vliet. This multi-factor model seeks low volatility stocks that also have strong momentum and high net payout yields.
WALMART INC (WMT) is a large-cap growth stock in the Retail (Grocery) industry. The rating using this strategy is 87% based on the firm’s underlying fundamentals and the stock’s valuation. A score of 80% or above typically indicates that the strategy has some interest in the stock and a score above 90% typically indicates strong interest.
The following table summarizes whether the stock meets each of this strategy's tests. Not all criteria in the below table receive equal weighting or are independent, but the table provides a brief overview of the strong and weak points of the security in the context of the strategy's criteria.
MARKET CAP: PASS
STANDARD DEVIATION: PASS
TWELVE MINUS ONE MOMENTUM: NEUTRAL
NET PAYOUT YIELD: NEUTRAL
FINAL RANK: FAIL
Detailed Analysis of WALMART INC
WMT Guru Analysis
WMT Fundamental Analysis
More Information on Pim van Vliet
Pim van Vliet Portfolio
About Pim van Vliet: In investing, you typically need to take more risk to get more return. There is one major exception to this in the factor investing world, though. Low volatility stocks have been proven to outperform their high volatility counterparts, and do so with less risk. Pim van Vliet is the head of Conservative Equities at Robeco Asset Management. His research into conservative factor investing led to the creation of this strategy and the publication of the book "High Returns From Low Risk: A Remarkable Stock Market Paradox". Van Vliet holds a PhD in Financial and Business Economics from Erasmus University Rotterdam.
Additional Research Links
Top Large-Cap Growth Stocks
Factor-Based Stock Portfolios
Dividend Aristocrats 2023
High Insider Ownership Stocks
Top S&P 500 Stocks
About Validea: Validea is aninvestment researchservice that follows the published strategies of investment legends. Validea offers both stock analysis and model portfolios based on gurus who have outperformed the market over the long-term, including Warren Buffett, Benjamin Graham, Peter Lynch and Martin Zweig. For more information about Validea, click here
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
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2023-12-08
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WMT
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InvestorPlace - Stock Market News, Stock Advice & Trading Tips
In recent days, many top hydrogen stocks have tumbled due to the leak of the conditions that the Biden administration is thinking of forcing firms to meet in order to receive the hydrogen tax credit. According to the leaked draft from the Treasury Department, for hydrogen producers to qualify for the credit, they would have to create their fuel using renewable energy projects launched within the previous three years, Bloomberg reported.
One source was quite fatalistic about the criteria. “If true, the Biden Administration’s proposed strategy for implementing these provisions will fail to get this new industry off the ground,” Jason Grumet, the CEO of the American Clean Power Association, stated. But, in my view, the rules will make life more difficult but not impossible for hydrogen producers. After all, many large renewable energy projects are being built every day in the U.S., and hydrogen producers can use wires and cables to tap into them. Given these points, I believe the recent sharp declines of the top hydrogen stocks are overdone. Here are three great names to buy on weakness.
Plug Power (PLUG)
Source: T. Schneider / Shutterstock.com
Even before hydrogen stocks’ recent retreat on worries about whether hydrogen producers will be able to obtain tax credits, Plug Power (NASDAQ:PLUG) stock had retreated tremendously.
That’s because the company reported weaker-than-expected third-quarter results and had warned that it may not be able to stay in business “without having to liquidate a portion of its assets and/or restructure its obligations,” Barron’s reported, citing an accounting expert.
But Plug’s Q3 miss was largely caused by hydrogen shortages in North America that should soon ease. What’s more, PLUG CEO Andy Marsh called the warning an “accounting technicality,” explaining that the company has many methods of raising the funds it needs to stay in business and keep making progress toward becoming a green hydrogen superpower.
Further, as I’ve noted in past columns, PLUG has many upcoming positive catalysts. Among these catalysts are the imminent launch of multiple green hydrogen plants that will greatly lower its costs and deals to start supplying Walmart (NYSE:WMT) and Amazon (NASDAQ:AMZN) with large amounts of the fuel in 2025.
Linde (LIN)
Source: nitpicker / Shutterstock.com
Linde’s (NASDAQ:LIN) hydrogen business is rapidly expanding, as the company reported on Dec. 5 that it had raised the production capacity of its liquid hydrogen plant in Alabama to “up to 30 tons per day.”
LIN indicated it will be able to easily sell all of the liquid hydrogen the plant produces, stating that “the plant will meet increasing demand for hydrogen from Linde’s existing and new customers.”
And in January, the company reported it would increase the production capacity of its green hydrogen plant in California to meet the growing demand for the fuel for transportation purposes.
LIN, which is already solidly profitable, looks poised to get a big boost from demand for the new hydrogen supplies it’s bringing online.
Air Products and Chemicals (APD)
Source: Andy Borysowski / Shutterstock.com
Another very profitable company poised to get a big boost from the hydrogen boom is Air Products and Chemicals (NYSE:APD). Calling itself “the world’s leading hydrogen supplier,” APD noted it “owns and operates over 100 hydrogen plants producing more than seven million kilograms (three billion standard cubic feet) per day of hydrogen.”
The company is planning to build a huge $7 billion hydrogen plant in Louisiana and another such plant in the Netherlands. Both facilities will use natural gas to create hydrogen fuel, but both facilities will also use carbon capture technologies to limit their carbon footprints.
APD stock has a rather attractive forward price-earnings ratio of 20, and analysts, on average, expect its earnings per share to jump to $14.20 next year, up from $11.51 in 2022.
On the date of publication, Larry Ramer held a long position in PLUG. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
Larry Ramer has conducted research and written articles on U.S. stocks for 15 years. He has been employed by The Fly and Israel’s largest business newspaper, Globes. Larry began writing columns for InvestorPlace in 2015. Among his highly successful, contrarian picks have been PLUG, XOM and solar stocks. You can reach him on Stocktwits at @larryramer.
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The post Harnessing Hydrogen: 3 Companies Leading the Way appeared first on InvestorPlace.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
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2023-12-08
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WMT
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Retail powerhouse Walmart (NYSE:WMT) is widely known for its affordable products and everyday essential offerings. With 50 consecutive years of dividend increases under its belt, the company has also built a reputation as a reliable dividend player, solidifying its place as a Dividend Aristocrat. Apart from offering a steady income stream, WMT is currently loved by Wall Street analysts, as it sports a Strong Buy consensus rating.
Reasons to Love WMT Stock
Walmart's strong core retail business, coupled with the company's strategic investments in e-commerce and digital platforms, is opening up new avenues for growth. This diversification is expected to further strengthen Walmart's financial position and potentially support dividend growth going forward.
Furthermore, the company has been setting up Walmart Health locations with the aim of providing low-cost healthcare services to its customers. With most of the Walmart stores located in prime locations, this expansion may help the company benefit from a huge growth opportunity in the healthcare sector.
According to WMT’s recent earnings report, the company delivered better-than-expected third-quarter results. The company’s U.S. comparable sales rose by 4.9%, and e-commerce sales jumped by 24% on the back of strength in pickup and delivery. Buoyed by strong Q3 and holiday momentum, WMT raised Fiscal 2024 sales expectations to 5% to 5.5% for Fiscal Year 2024 from the earlier guidance of 4% to 4.5%.
It is worth highlighting that hedge funds are also optimistic about Walmart, as they bought 579,900 shares of WMT stock last quarter. Overall, Walmart has a Very Positive Hedge Fund Confidence Signal at present.
Is it Good to Buy Walmart Stock?
Walmart has received 25 Buys and five Hold recommendations for a Strong Buy consensus rating. Further, WMT stock’s 12-month average price target of $180.79 implies 18.58% upside potential from current levels.
The Takeaway
Strong growth prospects, an impressive dividend growth history, and sound financial positions make WMT an attractive choice for those seeking consistent income. Additionally, the positive sentiment from analysts and hedge funds adds to the overall confidence in the stock.
Disclosure
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
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2023-12-07
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WMT
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InvestorPlace - Stock Market News, Stock Advice & Trading Tips
The retail sector has faced multiple challenges in the current year. Some of the headwinds include inflation, supply chain disruptions, and macroeconomic concerns. Additionally, tight monetary policies have impacted consumer spending trends to some extent. Amidst these headwinds, the valuation of some of the best retail stocks looks attractive.
I believe that the next year is likely to be better on a relative basis. It’s true that global slowdown concerns are significant. However, there is a strong case for multiple rate cuts to boost investment and consumption spending. Therefore, attractively valued retail stocks are likely to trend higher in the coming quarters.
When I am talking about 100% returns during the year, it’s unlikely for blue-chip retail stocks like Walmart (NYSE:WMT) and Costco Wholesale (NASDAQ:COST), among others. However, there are relatively smaller names that can surge higher.
Also, since most companies are pursuing omnichannel sales, I am looking at traditional retailers as well as e-commerce stocks. Let’s discuss three names that are likely to surge next year.
Miniso Group (MNSO)
Source: shutterstock.com/Hendrick Wu
Miniso Group (NYSE:MNSO) stock has delivered returns of almost 100% for year-to-date. I expect MNSO stock to double again from current levels in the next year. It’s worth noting that even after a meaningful rally, the stock trades at a forward price-earnings ratio of 23. A dividend yield of roughly 2% is also attractive and among the reasons to be bullish on the stock.
From a growth perspective, Miniso is among the best retail stocks to buy. For Q1 2024, the Company reported revenue growth of 36.7% on a year-on-year basis to $519.6 million. For the same period, adjusted EBITDA increased by 52.8% on a year-on-year basis to $139 million. Therefore, growth has been associated with healthy EBITDA margin expansion.
As of Q1 2024, Miniso reported a total of 6,115 lifestyle stores. The number of stores increased by 819 over the past year. At this pace and with an asset-light model, I expect robust growth to be sustained. This will support MNSO stock upside coupled with healthy dividend growth.
Coupang (CPNG)
Source: Ki young / Shutterstock.com
I would include online retail or e-commerce stocks in the list of names that I am bullish for in 2024. Coupang(NYSE:CPNG) stock looks deeply undervalued after remaining sideways for year-to-date. Even with the recent Q3 earnings miss, I believe that CPNG stock has a meaningful upside.
My view is underscored by the fact that 15 analysts offering a 12-month forward price forecast for CPNG stock have a median price target of $21. This would imply an upside of 38% from current levels. However, the most bullish analyst has a price target of $30. That would imply an upside of almost 100%.
For Q3 2023, Coupang reported revenue growth of 21% on a year-on-year basis to $6.2 billion. For the same period, the adjusted EBITDA margin was at 3.9%. Further, Coupang reported a 14% year-on-year growth in active customers to 20 million. As average revenue per user swells, there is visibility for revenue growth.
It’s worth noting that Coupang has reported operating and free cash flow of $2.6 billion and $1.9 billion for the trailing twelve months. I expect margin expansion and cash flow upside to sustain on the back of operating leverage.
Sea Limited (SE)
Source: Postmodern Studio / Shutterstock.com
Sea Limited (NYSE:SE) stock has continued to remain in a downtrend. However, I believe that SE stock is attractive at the current level of $39 per share. It’s worth noting that Sea Limited is diversified across digital gaming, e-commerce, and digital financial services. However, the e-commerce segment can be a potential cash flow machine in the coming years.
The first reason to be bullish on Sea Limited is exposure to high-growth markets of Southeast Asia, Latin America, and other emerging Asian countries. I expect stellar growth on the back of low e-commerce penetration in these markets.
Specific to the retail e-commerce sector, Sea reported revenue of $2.2 billion for Q3 2023. On a year-on-year basis, revenue increased by 16%. However, EBITDA level losses have been sustained and that’s a potential concern.
I believe that Sea Limited is positioned to narrow its EBITDA losses in the coming quarters. Operating leverage coupled with lower inflationary pressure is likely to support margins. At the same time, Sea Limited has a healthy cash buffer of $7.9 billion. This is likely to help in supporting aggressive investments for growth.
On the date of publication, Faisal Humayun did not hold (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
Faisal Humayun is a senior research analyst with 12 years of industry experience in the field of credit research, equity research and financial modeling. Faisal has authored over 1,500 stock specific articles with focus on the technology, energy and commodities sector.
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The post These 3 Promising Retail Stocks to Buy for 100% Returns in 2024 appeared first on InvestorPlace.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
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2023-12-07
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WMT
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Below is Validea's guru fundamental report for WALMART INC (WMT). Of the 22 guru strategies we follow, WMT rates highest using our Multi-Factor Investor model based on the published strategy of Pim van Vliet. This multi-factor model seeks low volatility stocks that also have strong momentum and high net payout yields.
WALMART INC (WMT) is a large-cap growth stock in the Retail (Grocery) industry. The rating using this strategy is 87% based on the firm’s underlying fundamentals and the stock’s valuation. A score of 80% or above typically indicates that the strategy has some interest in the stock and a score above 90% typically indicates strong interest.
The following table summarizes whether the stock meets each of this strategy's tests. Not all criteria in the below table receive equal weighting or are independent, but the table provides a brief overview of the strong and weak points of the security in the context of the strategy's criteria.
MARKET CAP: PASS
STANDARD DEVIATION: PASS
TWELVE MINUS ONE MOMENTUM: NEUTRAL
NET PAYOUT YIELD: NEUTRAL
FINAL RANK: FAIL
Detailed Analysis of WALMART INC
WMT Guru Analysis
WMT Fundamental Analysis
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About Pim van Vliet: In investing, you typically need to take more risk to get more return. There is one major exception to this in the factor investing world, though. Low volatility stocks have been proven to outperform their high volatility counterparts, and do so with less risk. Pim van Vliet is the head of Conservative Equities at Robeco Asset Management. His research into conservative factor investing led to the creation of this strategy and the publication of the book "High Returns From Low Risk: A Remarkable Stock Market Paradox". Van Vliet holds a PhD in Financial and Business Economics from Erasmus University Rotterdam.
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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
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2023-12-07
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WMT
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By Granth Vanaik
Dec 7 (Reuters) - Dollar General DG.N posted a smaller-than-expected drop in quarterly sales and beat profit estimates on Thursday, as more shoppers turned to its stores for cheaper groceries and other essentials amid sticky inflation pinching household budgets.
Shares of the company, down 45% so far this year, were up more than 4% in premarket trading after it also reaffirmed its full-year sales and profit forecasts.
Dollar General, which in October re-appointed former CEO Todd Vasos for a second stint, in a move to stabilize its struggling business, has already trimmed its annual sales and profit forecasts for a third time this year.
After several earnings misses and lowered forecasts, Dollar General reiterating its outlook suggests that the company is finally reaching a bottom for earnings for 2023, Truist Securities analyst Scot Ciccarelli wrote in a note.
Discount store operators in recent quarters have been struggling with a shift in shopper preferences for essentials over general merchandise, while they face a stiff competition from larger retailers such as Walmart WMT.N.
To counter this, Dollar General has been taking measures to keep prices low on everyday staples as well as offering discounts and promotions to clear excess stock.
Last week, rival Dollar Tree DLTR.O trimmed its annual sales forecast on weaker spending from lower-income households.
Dollar General's total merchandise inventories in the third quarter declined 1.8% year-on-year. But gross margins fell 147 basis points, as it grappled with a rise in retail shrink, where inventory is either lost, damaged or stolen.
Same-store sales fell 1.3% for the quarter, compared with LSEG estimates of a 2.08% drop.
It posted a per-share profit of $1.26, versus analysts' expectations of $1.19.
(Reporting by Granth Vanaik in Bengaluru; Editing by Shilpi Majumdar)
((Granth.Vanaik@thomsonreuters.com | X : https://twitter.com/Vanaik_Granth;))
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
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2023-12-06
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WMT
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Walmart (WMT) is one of the stocks most watched by Zacks.com visitors lately. So, it might be a good idea to review some of the factors that might affect the near-term performance of the stock.
Shares of this world's largest retailer have returned -6% over the past month versus the Zacks S&P 500 composite's +5.1% change. The Zacks Retail - Supermarkets industry, to which Walmart belongs, has lost 5.1% over this period. Now the key question is: Where could the stock be headed in the near term?
Although media reports or rumors about a significant change in a company's business prospects usually cause its stock to trend and lead to an immediate price change, there are always certain fundamental factors that ultimately drive the buy-and-hold decision.
Earnings Estimate Revisions
Here at Zacks, we prioritize appraising the change in the projection of a company's future earnings over anything else. That's because we believe the present value of its future stream of earnings is what determines the fair value for its stock.
Our analysis is essentially based on how sell-side analysts covering the stock are revising their earnings estimates to take the latest business trends into account. When earnings estimates for a company go up, the fair value for its stock goes up as well. And when a stock's fair value is higher than its current market price, investors tend to buy the stock, resulting in its price moving upward. Because of this, empirical studies indicate a strong correlation between trends in earnings estimate revisions and short-term stock price movements.
For the current quarter, Walmart is expected to post earnings of $1.63 per share, indicating a change of -4.7% from the year-ago quarter. The Zacks Consensus Estimate has changed -1.2% over the last 30 days.
The consensus earnings estimate of $6.44 for the current fiscal year indicates a year-over-year change of +2.4%. This estimate has changed +0.2% over the last 30 days.
For the next fiscal year, the consensus earnings estimate of $6.99 indicates a change of +8.5% from what Walmart is expected to report a year ago. Over the past month, the estimate has changed -0.3%.
With an impressive externally audited track record, our proprietary stock rating tool -- the Zacks Rank -- is a more conclusive indicator of a stock's near-term price performance, as it effectively harnesses the power of earnings estimate revisions. The size of the recent change in the consensus estimate, along with three other factors related to earnings estimates, has resulted in a Zacks Rank #3 (Hold) for Walmart.
The chart below shows the evolution of the company's forward 12-month consensus EPS estimate:
12 Month EPS
Projected Revenue Growth
While earnings growth is arguably the most superior indicator of a company's financial health, nothing happens as such if a business isn't able to grow its revenues. After all, it's nearly impossible for a company to increase its earnings for an extended period without increasing its revenues. So, it's important to know a company's potential revenue growth.
In the case of Walmart, the consensus sales estimate of $170.25 billion for the current quarter points to a year-over-year change of +3.8%. The $644.5 billion and $665.73 billion estimates for the current and next fiscal years indicate changes of +5.4% and +3.3%, respectively.
Last Reported Results and Surprise History
Walmart reported revenues of $160.8 billion in the last reported quarter, representing a year-over-year change of +5.2%. EPS of $1.53 for the same period compares with $1.50 a year ago.
Compared to the Zacks Consensus Estimate of $159.49 billion, the reported revenues represent a surprise of +0.83%. The EPS surprise was 0%.
Over the last four quarters, Walmart surpassed consensus EPS estimates three times. The company topped consensus revenue estimates each time over this period.
Valuation
Without considering a stock's valuation, no investment decision can be efficient. In predicting a stock's future price performance, it's crucial to determine whether its current price correctly reflects the intrinsic value of the underlying business and the company's growth prospects.
While comparing the current values of a company's valuation multiples, such as price-to-earnings (P/E), price-to-sales (P/S) and price-to-cash flow (P/CF), with its own historical values helps determine whether its stock is fairly valued, overvalued, or undervalued, comparing the company relative to its peers on these parameters gives a good sense of the reasonability of the stock's price.
The Zacks Value Style Score (part of the Zacks Style Scores system), which pays close attention to both traditional and unconventional valuation metrics to grade stocks from A to F (an An is better than a B; a B is better than a C; and so on), is pretty helpful in identifying whether a stock is overvalued, rightly valued, or temporarily undervalued.
Walmart is graded B on this front, indicating that it is trading at a discount to its peers. Click here to see the values of some of the valuation metrics that have driven this grade.
Conclusion
The facts discussed here and much other information on Zacks.com might help determine whether or not it's worthwhile paying attention to the market buzz about Walmart. However, its Zacks Rank #3 does suggest that it may perform in line with the broader market in the near term.
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Walmart Inc. (WMT) : Free Stock Analysis Report
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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
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2023-12-06
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WMT
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With Black Friday and Cyber Monday behind us, it's time to focus on a festive and lucrative time of year - Hanukkah, which starts at sundown on Thursday. The best stocks to buy on Hanukkah will be the ones that provide value and growth year-round but can also get a nice boost during the holiday shopping season.
During these troubling times, we can still dust off the menorah, celebrate with family, and honor our traditions. At the same time, we can consider a variety of opportunities to grow our portfolios with three Hanukkah-themed investments that could gift us with profits throughout 2024.
Mattel (NASDAQ:MAT)
Shoppers are spending huge quantities of money on Hanukkah gifts this holiday season. Sure, they already bought gifts for children on Black Friday and Cyber Monday, but not everyone planned their shopping ahead of time. Besides, Hanukkah requires not just one gift, but eight of them, so don't assume that the toy-buying spree is over yet.
Two giant toy manufacturers that should generate powerful profits in December are Hasbro (NASDAQ:HAS) and Mattel. To hedge your bets and diversify your portfolio a bit, you could consider a share position in both companies.
Yet, a head-to-head comparison leans toward Mattel over Hasbro. As we'll see in a moment, Mattel is heavily favored by the analyst community. Meanwhile, analysts generally consider Hasbro stock a Moderate Buy, which isn't bad, but it's not anything to write home about.
Mattel, in contrast, looks like a huge potential winner because of Barbie's recent resurgence. Kids and adults flocked to the Barbie movie, and this translated to a bump in quarterly doll sales. So, MAT stock could be a high-growth runner as parents scramble to get last-minute gifts for their kids, and maybe even for themselves as well.
What is the Price Target for Mattel Stock?
On TipRanks, MAT is a Strong Buy based on eight unanimous Buy ratings assigned in the past three months. The average Mattel stock price target is $24.14, implying 27.25% upside potential.
Hershey (NYSE:HSY)
I must admit that one of my favorite things about Hanukkah has always been those foil-wrapped chocolate coins. Sure, they're available online year-round, but Hanukkah gives me an excuse to unwrap and eat them to my heart's content.
Thinking of this turns my attention to chocolate makers as a possible investment. I've heard it said that companies like Cadbury chocolate manufacturer Mondelez International (NASDAQ:MDLZ) and Hershey tend to be recession-proof, or at least recession-resistant.
Hence, it's fine to consider both of these companies, but I'm picking Hershey stock as my favorite for several reasons. First and foremost, I checked Hershey's earnings and revenue history chart and observed consistent growth in the company's revenue and earnings.
Speaking of earnings, Hershey has a terrific track record of beating Wall Street's consensus quarterly EPS forecasts. On top of all that, Hershey offers a nice gift every three months in the form of dividend distributions. Specifically, the company's dividend yield of 2.33% exceeds the sector average yield, so I invite you to consider collecting some tasty dividends with HSY stock.
What is the Price Target for Hershey Stock?
On TipRanks, HSY is a Moderate Buy based on six Buys and 11 Hold ratings given in the past three months. The average Hershey stock price target is $213.65, implying 12.92% upside potential.
Walmart (NYSE:WMT)
Other ideas for Hanukkah stocks might include candle makers or olive oil producers since we light the menorah with olive oil. However, the businesses that manufacture these products aren't typically listed on a major U.S. stock exchange. On the other hand, legions of shoppers will buy these items at the big-box behemoth, Walmart.
It's possible to purchase candles, olive oil, and other Hanukkah-associated goods online, but many people would prefer to simply pick them up locally at Walmart. Why fight this trend as an investor?
Moreover, Walmart usually beats analysts' quarterly consensus EPS estimates and is known to slowly but surely increase its dividend payouts. Also, bear in mind that Walmart owns Sam's Club, where shoppers look for prime deals for Hanukkah and throughout the year.
Like Hershey stock, Walmart stock is generally low-volatility and somewhat recession-resistant. Therefore, I'm considering a share stake in Walmart for December as well as for the coming year.
What is the Price Target for Walmart Stock?
On TipRanks, WMT comes in as a Strong Buy, based on 25 Buys and five Hold ratings. The average Walmart stock price target is $180.79, implying 17.4% upside potential.
The Takeaway
From Mattel to Hershey and even Walmart, the brands that remain strong during the eight days of Hanukkah are resilient in all seasons. It just goes to show that a solid business can offer value and growth regardless of the time of year.
Nonetheless, Hanukkah is a time for joy and reflection, and it's also a great time to re-evaluate your portfolio's holdings. Feel free to light that first candle, then, and consider adding a few shares of MAT, HSY, and WMT stock for the holidays and beyond.
Disclosure
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
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2023-12-06
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WMT
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Looking at options trading activity among components of the Russell 3000 index, there is noteworthy activity today in Capital One Financial Corp (Symbol: COF), where a total volume of 24,293 contracts has been traded thus far today, a contract volume which is representative of approximately 2.4 million underlying shares (given that every 1 contract represents 100 underlying shares). That number works out to 102.8% of COF's average daily trading volume over the past month, of 2.4 million shares. Particularly high volume was seen for the $130 strike call option expiring January 19, 2024, with 5,216 contracts trading so far today, representing approximately 521,600 underlying shares of COF. Below is a chart showing COF's trailing twelve month trading history, with the $130 strike highlighted in orange:
Avis Budget Group Inc (Symbol: CAR) saw options trading volume of 3,799 contracts, representing approximately 379,900 underlying shares or approximately 101.8% of CAR's average daily trading volume over the past month, of 373,185 shares. Especially high volume was seen for the $200 strike call option expiring January 19, 2024, with 700 contracts trading so far today, representing approximately 70,000 underlying shares of CAR. Below is a chart showing CAR's trailing twelve month trading history, with the $200 strike highlighted in orange:
And Walmart Inc (Symbol: WMT) saw options trading volume of 93,513 contracts, representing approximately 9.4 million underlying shares or approximately 100.1% of WMT's average daily trading volume over the past month, of 9.3 million shares. Especially high volume was seen for the $155 strike call option expiring December 15, 2023, with 7,997 contracts trading so far today, representing approximately 799,700 underlying shares of WMT. Below is a chart showing WMT's trailing twelve month trading history, with the $155 strike highlighted in orange:
For the various different available expirations for COF options, CAR options, or WMT options, visit StockOptionsChannel.com.
Today's Most Active Call & Put Options of the S&P 500 »
Also see:
GHVI YTD Return
MOAT Average Annual Return
AMTX shares outstanding history
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
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2023-12-06
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WMT
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Adds details from Morgan Stanley conference throughout
Dec 6 (Reuters) - Walmart's WMT.N top executives said on Wednesday consumer behavior would be tougher to predict next year as financial strain pushes customers to be more cautious about spending their dollars.
Earlier on Wednesday, CEO Doug McMillon in an interview with CNBC said rising credit card balances and dwindling household bank accounts do raise questions about how much consumers would be spending.
Last month, Walmart had said that U.S. consumers were acting more cautious with spending during the holiday season. But data on Thanksgiving weekend showed that deep discounts on everything from beauty products and toys to electronics lured shoppers to spend bringing a relief to worried retailers.
(Reporting by Ananya Mariam Rajesh in Bengaluru and Siddharth Cavale in New York; Editing by Shailesh Kuber)
((AnanyaMariam.Rajesh@thomsonreuters.com ; Twitter: https://twitter.com/AnanyaMariam;))
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
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2023-12-06
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WMT
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InvestorPlace - Stock Market News, Stock Advice & Trading Tips
Apple (NASDAQ:AAPL) was the first company to reach $1 trillion in market capitalization in 2018. Value creation has continued, with its market valuation topping $3 trillion in June 2023. Apple is a good example of stories driven by innovation that are a buy-and-hold forever. While AAPL stock remains interesting, I am on the lookout for the next trillion-dollar companies. Without a doubt, there will be major growth stories in the coming years that will translate into a surge in market valuation.
It won’t be just companies with sizzling growth entering the trillion-dollar club. There will be blue-chip stocks that gradually create value. This column focuses on these stocks with an investment horizon of five years.
A key screener is the cash flow potential. Ultimately, valuation depends on the company’s ability to generate cash. Apple’s core business is a cash flow machine allowing it to invest in dividends, share repurchases, acquisitions and product development.
Let’s talk about three potential trillion-dollar companies.
Chevron (CVX)
Source: Denis Kuvaev / Shutterstock.com
There is no doubt that policymakers globally are focusing on green energy. However, it’s too early to declare that the days of fossil fuel are over. Also, crude has declined due to sluggish global growth. With potential rate cuts impending next year, buying oil and gas stocks is a good opportunity. Chevron (NYSE:CVX) is one stock likely to create immense value.
After a decline of 18% year-to-date, CVX stock looks undervalued. Further, the stock offers a dividend yield of 4.17%. Given the company’s low break-even assets and ability to generate strong cash flows, I am currently bullish.
To put things into perspective, Chevron reported operating cash flow of $9.7 billion for Q3 2023. This translates into an annual cash flow potential of $40 billion. Additionally, cash flows will swell with the impending acquisition of Hess Corporation (NYSE:HES). After the acquisition, Chevron expects an annual capital expenditure of $19 billion to $22 billion. These investments will translate into production growth and further upside in free cash flows.
Salesforce (CRM)
Source: Sundry Photography / Shutterstock.com
Salesforce (NYSE:CRM) stock has surged by 86% year-to-date. However, valuations look reasonable, with the stock trading at a forward price-earnings ratio of 30.7. Salesforce has a big addressable market, ample headroom for growth, and has delivered healthy cash flows.
As an overview, Salesforce describes itself as the leading AI-driven customer relationship management company. By 2026, Salesforce believes its solutions will have a total addressable market of $290 billion. With presence across industries and geographic diversification, the growth outlook is robust.
For Q3 2023, Salesforce reported healthy revenue of $8.72 billion, and the outlook for Q4 is also positive. However, I want to focus on the cash flows. For the year’s first nine months, Salesforce reported operating cash flow of $6.8 billion. This implies an annual OCF potential of $9 billion. Further, the company has cash and equivalents of nearly $12 billion as of Q3. The cash flow potential and a healthy liquidity buffer provide scope for aggressive expansion and investment in product development.
Costco Wholesale (COST)
Source: ARTYOORAN / Shutterstock.com
Costco Wholesale (NASDAQ:COST) might race ahead of Walmart (NYSE:WMT) to become the first trillion-dollar retail stock. Of course, I am talking about traditional retail and not the likes of Amazon (NASDAQ:AMZN).
It’s worth noting that retail stocks have faced inflation-related challenges coupled with macroeconomic headwinds. However, COST stock has been a performer with an upside of 34% year-to-date. I expect strong comparable store sales growth to sustain the positive momentum.
An important point is that Costco has 738 warehouses in the United States, Canada and Mexico. Overall, the company has 861 warehouses globally. There is a significant concentration in North America. With just five warehouses in China, there is ample scope for expansion and growth.
Costco has also generated $4.6 billion in membership fees in the last 12 months. I expect recurring membership fees to swell further in the coming years. This will boost key margins and cash flows.
On the date of publication, Faisal Humayun did not hold (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
Faisal Humayun is a senior research analyst with 12 years of industry experience in the field of credit research, equity research and financial modeling. Faisal has authored over 1,500 stock specific articles with focus on the technology, energy and commodities sector.
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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
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2023-12-06
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WMT
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Symbotic (NASDAQ: SYM) stock has been on fire in 2023, riding the coattails of recent advances in artificial intelligence (AI). Share prices of the warehouse and supply chain automation specialist are up 367% so far this year, more than 19 times the increase of the S&P 500. This is far better than its performance last year. After its debut on the public markets via a reverse merger with a special purpose acquisition company (SPAC) in June 2022, the stock sank, closing out last year down by 40%.
Symbotic's rally in 2023 has been fueled by the robust adoption of its services and strong financial results, as well as its deep ties to AI. It reported record sales and accelerating deployment, and some investors are betting there could be further gains ahead.
However, investors who missed out on the stock's blistering rally are left with a quandary: With such a run-up in the rear-view mirror, is it simply too late to jump in, or can investors who buy now hope for further strong gains?
Image source: Getty Images.
The warehouse of the future
Imagine you're a warehouse operator struggling to maximize the amount of inventory you can squeeze into a single warehouse. You have to consider not only the shelf space necessary for the inventory itself but also the weight disbursal to ensure the heaviest items are near the bottom and those most susceptible to being crushed near the top. You need to ensure that you have sufficient room to access and move your inventory, while also considering the maneuverability of the forklifts or robots used to transport products. Most difficult of all, these considerations change with each and every new shipment and delivery.
That's where Symbotic comes in. The company has developed an AI-controlled system that solves all these problems. Its proprietary software coordinates the entire warehouse operation while a cadre of fully autonomous robots scamper about doing its bidding. The unique system architecture and modular design can be retrofitted into an existing space or integrated into a structure built from the ground up. Not only does the system optimize the amount of storage space available, but it can also take items from existing inventory and design and create custom mixed pallets for shipment to merchants.
Symbotic's novel solution is creating strong demand and attracting attention from some of the world's largest retailers, including such household names as Walmart (NYSE: WMT), Target, Albertsons, and C&S Wholesale Grocers. In fact, Walmart was so impressed it bought an 11% stake in the company. The retail giant also penned an agreement to outfit all 42 of its regional distribution centers with Symbotic's warehouse management system.
For its fiscal 2023 fourth quarter, which ended Sept. 30, Symbotic generated revenue of $392 million, up 61% year over year. While it has yet to generate a profit on a GAAP (generally accepted accounting principles) basis, Symbotic has generated positive operating cash flows in each of the past four quarters and for its fiscal 2023. This suggests that its losses are the result of non-cash items, including depreciation, and that sustained profitability is on the horizon.
Image source: Symbotic.
What the future holds
Retailers -- particularly grocery stores and discount retailers -- historically operate on thin margins and are always looking for any advantage they can get. Furthermore, there's a paradigm shift going on in the industry as merchants shift from brick-and-mortar or e-commerce to more omnichannel strategies.
One of the biggest incentives for retailers to use Symbotic's system is the cost savings it can provide. By automating warehouse systems, clients reduce their labor costs, lower transportation and operating expenses, and increase efficiency. Case studies suggest that the system can pay for itself in as little as five years, and could save retailers hundreds of millions of dollars over the useful life of the system.
The company was originally focused on two categories in the domestic market -- general merchandise, and food and grocery -- but it's expanding beyond those niches. Symbotic has plans to move into supporting retailers in consumer-packaged goods, apparel, auto parts, and home improvement, as well as third-party logistics providers. And it plans to push into international markets as well. All of this will boost its total market opportunity from $144 billion to $432 billion.
How to approach Symbotic now
Symbotic hasn't attracted a lot of attention from Wall Street thus far. However, of the 14 analysts who had offered an opinion as of November, 10 rated it a buy or strong buy, and none recommended selling.
Investors who fear they have missed the boat take heart. Symbotic stock is selling for just 3 times trailing-12-month sales and 1.8 times forward sales, which makes it a relative bargain for an AI stock.
Buying shares in Symbotic might seem like a no-brainer at first glance, but there is an asterisk for investors to consider. It has a high degree of customer concentration, with one customer accounting for 87% of its revenue. While recent regulatory filings are mum as to the identity of this client, a prospectus from late last year described Walmart as Symbotic's largest customer. Relying so heavily on any one customer is risky, but that concentration should decrease as Symbotic adds new customers.
Investors comfortable with accepting a little extra risk in exchange for greater potential rewards should consider taking a stake in Symbotic to ride the wave of AI and warehouse automation.
10 stocks we like better than Symbotic
When our analyst team has a stock tip, it can pay to listen. After all, the newsletter they have run for over a decade, Motley Fool Stock Advisor, has tripled the market.*
They just revealed what they believe are the ten best stocks for investors to buy right now... and Symbotic wasn't one of them! That's right -- they think these 10 stocks are even better buys.
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*Stock Advisor returns as of December 4, 2023
Danny Vena has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Target and Walmart. The Motley Fool has a disclosure policy.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
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2023-12-06
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WMT
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Below is Validea's guru fundamental report for WALMART INC (WMT). Of the 22 guru strategies we follow, WMT rates highest using our Multi-Factor Investor model based on the published strategy of Pim van Vliet. This multi-factor model seeks low volatility stocks that also have strong momentum and high net payout yields.
WALMART INC (WMT) is a large-cap growth stock in the Retail (Grocery) industry. The rating using this strategy is 87% based on the firm’s underlying fundamentals and the stock’s valuation. A score of 80% or above typically indicates that the strategy has some interest in the stock and a score above 90% typically indicates strong interest.
The following table summarizes whether the stock meets each of this strategy's tests. Not all criteria in the below table receive equal weighting or are independent, but the table provides a brief overview of the strong and weak points of the security in the context of the strategy's criteria.
MARKET CAP: PASS
STANDARD DEVIATION: PASS
TWELVE MINUS ONE MOMENTUM: NEUTRAL
NET PAYOUT YIELD: NEUTRAL
FINAL RANK: FAIL
Detailed Analysis of WALMART INC
WMT Guru Analysis
WMT Fundamental Analysis
More Information on Pim van Vliet
Pim van Vliet Portfolio
About Pim van Vliet: In investing, you typically need to take more risk to get more return. There is one major exception to this in the factor investing world, though. Low volatility stocks have been proven to outperform their high volatility counterparts, and do so with less risk. Pim van Vliet is the head of Conservative Equities at Robeco Asset Management. His research into conservative factor investing led to the creation of this strategy and the publication of the book "High Returns From Low Risk: A Remarkable Stock Market Paradox". Van Vliet holds a PhD in Financial and Business Economics from Erasmus University Rotterdam.
Additional Research Links
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About Validea: Validea is aninvestment researchservice that follows the published strategies of investment legends. Validea offers both stock analysis and model portfolios based on gurus who have outperformed the market over the long-term, including Warren Buffett, Benjamin Graham, Peter Lynch and Martin Zweig. For more information about Validea, click here
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
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2023-12-06
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WMT
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Costco (NASDAQ: COST) isn't playing by the same rules as other retailers. The company makes nearly all of its profit from memberships, which means the retail operations can be run at breakeven.
In this video, Travis Hoium goes through the numbers and shows why even the best big-box retailers can't compete with Costco's prices.
*Stock prices used were end-of-day prices of Dec. 1, 2023. The video was published on Dec. 4, 2023.
10 stocks we like better than Costco Wholesale
When our analyst team has a stock tip, it can pay to listen. After all, the newsletter they have run for over a decade, Motley Fool Stock Advisor, has tripled the market.*
They just revealed what they believe are the ten best stocks for investors to buy right now... and Costco Wholesale wasn't one of them! That's right -- they think these 10 stocks are even better buys.
See the 10 stocks
*Stock Advisor returns as of December 4, 2023
Travis Hoium has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Costco Wholesale, Target, and Walmart. The Motley Fool has a disclosure policy. Travis Hoium is an affiliate of The Motley Fool and may be compensated for promoting its services. If you choose to subscribe through their link they will earn some extra money that supports their channel. Their opinions remain their own and are unaffected by The Motley Fool.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
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2023-12-06
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WMT
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(RTTNews) - Walmart Inc. (NYSE: WMT) will present at Morgan Stanley Global Consumer and Retail Conference.
The event is scheduled to begin at 12:45 PM ET on Dec 6, 2023.
To access the live webcast, log on to https://corporate.walmart.com/news/events
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
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2023-12-05
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WMT
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Looking at the universe of stocks we cover at Dividend Channel, on 12/7/23, Tapestry Inc (Symbol: TPR), Kimberly-Clark Corp. (Symbol: KMB), and Walmart Inc (Symbol: WMT) will all trade ex-dividend for their respective upcoming dividends. Tapestry Inc will pay its quarterly dividend of $0.35 on 12/26/23, Kimberly-Clark Corp. will pay its quarterly dividend of $1.18 on 1/3/24, and Walmart Inc will pay its quarterly dividend of $0.57 on 1/2/24. As a percentage of TPR's recent stock price of $33.02, this dividend works out to approximately 1.06%, so look for shares of Tapestry Inc to trade 1.06% lower — all else being equal — when TPR shares open for trading on 12/7/23. Similarly, investors should look for KMB to open 0.95% lower in price and for WMT to open 0.37% lower, all else being equal.
Below are dividend history charts for TPR, KMB, and WMT, showing historical dividends prior to the most recent ones declared.
Tapestry Inc (Symbol: TPR):
Kimberly-Clark Corp. (Symbol: KMB):
Walmart Inc (Symbol: WMT):
In general, dividends are not always predictable, following the ups and downs of company profits over time. Therefore, a good first due diligence step in forming an expectation of annual yield going forward, is looking at the history above, for a sense of stability over time. This can help in judging whether the most recent dividends from these companies are likely to continue. If they do continue, the current estimated yields on annualized basis would be 4.24% for Tapestry Inc, 3.80% for Kimberly-Clark Corp., and 1.48% for Walmart Inc.
In Tuesday trading, Tapestry Inc shares are currently up about 1%, Kimberly-Clark Corp. shares are up about 0.1%, and Walmart Inc shares are trading flat on the day.
Click here to learn which 25 S.A.F.E. dividend stocks should be on your radar screen »
Also see:
VPCB market cap history
HCAC shares outstanding history
Institutional Holders of XSPL
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
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2023-12-05
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WMT
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Below is Validea's guru fundamental report for WALMART INC (WMT). Of the 22 guru strategies we follow, WMT rates highest using our Multi-Factor Investor model based on the published strategy of Pim van Vliet. This multi-factor model seeks low volatility stocks that also have strong momentum and high net payout yields.
WALMART INC (WMT) is a large-cap growth stock in the Retail (Grocery) industry. The rating using this strategy is 87% based on the firm’s underlying fundamentals and the stock’s valuation. A score of 80% or above typically indicates that the strategy has some interest in the stock and a score above 90% typically indicates strong interest.
The following table summarizes whether the stock meets each of this strategy's tests. Not all criteria in the below table receive equal weighting or are independent, but the table provides a brief overview of the strong and weak points of the security in the context of the strategy's criteria.
MARKET CAP: PASS
STANDARD DEVIATION: PASS
TWELVE MINUS ONE MOMENTUM: NEUTRAL
NET PAYOUT YIELD: NEUTRAL
FINAL RANK: FAIL
Detailed Analysis of WALMART INC
WMT Guru Analysis
WMT Fundamental Analysis
More Information on Pim van Vliet
Pim van Vliet Portfolio
About Pim van Vliet: In investing, you typically need to take more risk to get more return. There is one major exception to this in the factor investing world, though. Low volatility stocks have been proven to outperform their high volatility counterparts, and do so with less risk. Pim van Vliet is the head of Conservative Equities at Robeco Asset Management. His research into conservative factor investing led to the creation of this strategy and the publication of the book "High Returns From Low Risk: A Remarkable Stock Market Paradox". Van Vliet holds a PhD in Financial and Business Economics from Erasmus University Rotterdam.
Additional Research Links
Top NASDAQ 100 Stocks
Factor-Based ETF Portfolios
Harry Browne Permanent Portfolio
Ray Dalio All Weather Portfolio
High Shareholder Yield Stocks
About Validea: Validea is aninvestment researchservice that follows the published strategies of investment legends. Validea offers both stock analysis and model portfolios based on gurus who have outperformed the market over the long-term, including Warren Buffett, Benjamin Graham, Peter Lynch and Martin Zweig. For more information about Validea, click here
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
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2023-12-05
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WMT
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Symbotic (NASDAQ: SYM) has been one of the market's hottest growth stocks since it went public by merging with a special purpose acquisition company (SPAC) last June. The warehouse automation company's shares opened at $10.54 each on the first day, soared to an all-time high of $63.54 on July 31, 2023, and currently trade at about $56.
Does Symbotic still have more upside potential after racking up those multibagger gains? Let's review three reasons to buy Symbotic stock -- as well as three reasons to sell it -- to see where it might be headed.
Image source: Getty Images.
The three reasons to buy Symbotic
Investors should still consider buying Symbotic's stock because it's growing rapidly, its profitability is improving, and its core market is still expanding.
Symbotic's revenue surged 136% in fiscal 2022 (which ended last September) and rose another 98% to $1.18 billion in fiscal 2023. In addition to nearly doubling its revenue in fiscal 2023, it multiplied its total sites in deployment, almost doubled the total number of stores served by its systems, and significantly expanded its annual gross margins. Analysts expect its revenue to continue to rise at a compound annual growth rate (CAGR) of 46% from fiscal 2023 to fiscal 2025.
Symbotic also achieved its goal of turning profitable on an adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) basis by the end of fiscal 2023. Its adjusted EBITDA margin turned positive in the fourth quarter of the year, and analysts expect it to generate a positive adjusted EBITDA of $146 million in fiscal 2024, along with its first generally accepted accounting principles (GAAP) net profit of $34 million. They forecast its adjusted EBITDA and GAAP net income will soar another 157% and 694%, respectively, in fiscal 2025 as economies of scale kick in.
We should take those bullish estimates with a grain of salt, but they indicate Symbotic will retain its early-mover advantage in the warehouse automation market as an increasing number of companies automate their fulfillment centers and logistics networks. According to the company's own estimates, a $50 million investment in just one of its modules (of automated robots for processing pallets and cases) can generate $250 million in savings over 25 years.
Mordor Intelligence expects the warehouse automation market to expand at a CAGR of 16% from 2023 to 2028. So even if the broader market cools off, Symbotic should still have plenty of room to grow.
The three reasons to sell Symbotic
Symbotic's growth rates are impressive, but investors should still consider selling the stock because it has severe customer concentration issues, its stock is expensive, and insiders are cashing out.
Symbotic generates nearly 90% of its revenue from Walmart (NYSE: WMT), which was its largest investor prior to its public debut and still owns 11% of the company. Symbotic holds a Master Automation Agreement (MAA) with Walmart to automate all 42 of the latter's regional distribution centers across the U.S. through 2034. It's gradually diversifying its customer base via a joint venture with SoftBank (OTC: SFTB.Y) (which owned the SPAC it merged with), as well as through deals with Target, Albertsons, and C&S Wholesale Grocers, but it will remain overwhelmingly dependent on Walmart for the foreseeable future.
Symbotic's dual-class share structure also obfuscates its true valuation. Its enterprise value of $4 billion, which doesn't include all of those shares, might seem cheap at 2 times this year's sales. But its market capitalization of $32 billion -- which includes both classes of shares -- looks a lot pricier at 18 times this year's sales.
Symbotic's valuation was likely inflated by the buying frenzy in artificial intelligence (AI) stocks over the past year. Symbotic's warehouse robots are certainly driven by AI, but the company shouldn't be confused with more straightforward AI plays like Nvidia.
If Symbotic's stock had more room to run after its five-bagger gains over the past 18 months, then its insiders should probably be scooping up more shares. But over the past three months, they sold more than twice as many shares as they bought. That chilly insider sentiment suggests it might be time to book profits in this high-flying growth stock.
Which argument makes more sense?
I believe Symbotic's stock could continue rising if it scales up its business, diversifies its customer base, and achieves stable GAAP profitability. But if fails to check just one of those boxes, its stock could crumble under the weight of its valuation. The bullish case still makes sense for speculative investors who are willing to ride out the near-term volatility. However, conservative investors might want to see if it can expand beyond its niche and widen its moat before pulling the trigger.
10 stocks we like better than Symbotic
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They just revealed what they believe are the ten best stocks for investors to buy right now... and Symbotic wasn't one of them! That's right -- they think these 10 stocks are even better buys.
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*Stock Advisor returns as of November 29, 2023
Leo Sun has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Nvidia, Target, and Walmart. The Motley Fool has a disclosure policy.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
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2023-12-04
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WMT
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Last month was a much-needed win for the stock market. When all was said and done the Dow Jones Industrial Average (DJINDICES: ^DJI) gained nearly 9% in November, reversing a nasty downtrend and reaching a new multi-month high in the process.
Not every Dow stock followed suit, though. A handful of its components managed to log a loss last month.
Savvy investors know these pullbacks might be a buying opportunity. They also know, however, this weakness may only be part of a much bigger sell-off. Here's what you need to know about the Dow's worst three performers last month.
The Dow's biggest November losers
Cutting straight to the chase, November's biggest losers among the Dow's 30 holdings are Cisco Systems (NASDAQ: CSCO), Walgreens Boots Alliance (NASDAQ: WBA), and Walmart (NYSE: WMT). They were surprising laggards given these companies' statures. Cisco led the way with a tumble of a little more than 7%, Walgreens fell 5.4%, while Walmart slipped just a little less than 5%.
CSCO data by YCharts
What went wrong?
For Walmart, most of its loss came on the heels of the release of its fiscal third-quarter numbers (for the period ending Oct. 27). Although sales and earnings were both up year over year and both better than expected, management rang alarm bells for the quarter now underway.
Specifically, CFO John David Rainey noted that sales had been "somewhat uneven" in the prior couple of months, suggesting that inflation and higher interest rates have finally caught up with consumers. Guidance for the full year was also lackluster. Walmart believes it will earn between $6.40 and $6.48 per share in fiscal 2024, versus analysts' consensus of $6.50.
Shares of networking technology giant Cisco fell the same day for largely the same reason. That is, although sales of $14.7 billion and per-share earnings of $1.11 for the three-month stretch in question were both up year over year (and both better than expected), guidance for the quarter ending in January was disappointing.
The company's calling for a 13% quarter-to-quarter decline in revenue because, as CEO Chuck Robbins explains, "After three quarters of exceptionally strong product delivery, our customers are now focused on installing and implementing these unprecedented levels of products."
As for Walgreens, although it would be easy to link its pharmacists' walkout (in protest of their difficult working conditions) in late-October to last month's loss, the two aren't connected much, if at all. Rather, Walgreens shares simply extended a sell-off that's been underway since 2015 due to the ongoing deterioration of the company's health. Indeed, the stock reached a multi-decade low last month on a combination of concerns about theft, a dividend cut, management turnover, layoffs, and labor headaches, just to name a few.
Time to buy?
The question remains -- are any or all of these discounted stocks a buy now following (and because of) their November setbacks?
It's tempting, to be sure. Investors are generally encouraged to step into good stocks while they're "on sale." And, by virtue of being a constituent of the Dow Jones Industrial Average, these three names are arguably within the upper echelon of prospective stock picks.
This line of thinking, however, looks past one of the more important tenets of successful investing. That is, one month's performance doesn't really mean much in the grand scheme of things. The bigger question is still whether or not a particular company is worth owning at any price.
And that's why November's Dow laggards are a mixed bag now. Some of them are worth stepping into here, while others aren't.
Walgreens Boots Alliance is clearly a name best avoided for the time being. Although its shares are priced at a dirt-cheap forward-looking price-to-earnings ratio of 6 and its dividend yield is a sky-high 9.6%, nothing about this company's results is guaranteed anymore. It could take several more years to undo the damage it's done to itself, including the 2014 merger of Walgreens and Boots Alliance (that's now potentially on its way to being undone) and last year's acquisition of primary care and home care company CareCentrix.
Expanding your reach within a sector generally makes sense on paper. Even companies within the same business sector, however, don't always mesh well in the real world. In the meantime the retailer remains highly vulnerable to organized shoplifting, its relationship with its pharmacists is tense, and a new CEO just took the helm. All of these are liabilities weighing on the stock.
Walmart's a slightly different story. The stock's not a buy right now not because the retailer is performing poorly, but because shares have become so expensive thanks to the 30% run-up from last March's low. Even with the recent pullback, the stock's trading at a trailing price-to-earnings ratio of more than 25. That's pretty rich by this ticker's historical standards. This is a case where you may be best served by holding out for a better price. The company will almost certainly do its part -- growing -- in the meantime.
The only name of the three in question that's a resounding buy right now is Cisco.
Simply put, CEO Chuck Robbins is right. Cisco sales have been well up since the latter part of last year as enterprises finally began the upgrades of their networking hardware that had been put on hold during the COVID-19 pandemic. They don't need more new hardware just yet.
But this headwind was already being priced in. Thanks to last month's sell-off Cisco stock is down 25% from its late-2021 high, and back to where it was trading all the way back in 2019 despite plenty of profits still being produced during this period.
CSCO Revenue (Quarterly) data by YCharts
These earnings aren't likely to be disrupted anytime soon, particularly now that Cisco is also a serious software company. Its recurring, subscription-based software sales now stand at an annualized rate of $24.5 billion, with even more software revenue than that already lined up. For the sake of comparison, the company's done about $58 billion worth of business over the course of the past four reported quarters.
Bolstering the bullish argument here is Cisco stock's valuation. It's an unusually cheap technology stock priced at only 14 times this year's expected per-share earnings of $3.53. It's even more unusual in that this technology name doesn't just pay a dividend, but pays a sizable one translating into a healthy yield of 3.2%.
The bigger lesson here, of course, is understanding that when it comes to a stock's performance there's always more to the story. Your job as an investor is finding out what the rest of that story is.
10 stocks we like better than Cisco Systems
When our analyst team has a stock tip, it can pay to listen. After all, the newsletter they have run for over a decade, Motley Fool Stock Advisor, has tripled the market.*
They just revealed what they believe are the ten best stocks for investors to buy right now... and Cisco Systems wasn't one of them! That's right -- they think these 10 stocks are even better buys.
See the 10 stocks
*Stock Advisor returns as of November 29, 2023
James Brumley has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Cisco Systems and Walmart. The Motley Fool has a disclosure policy.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
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