Walmart Inc (WMT)

Wouldn’t be opposed to buying this. It is a high-quality name. They are benefiting from the economy of scale with over 11,000 stores and are forecast opening 400 more this year. To combat some of the online competitors, they will match prices. Rolling out a partnership with a company called Wild Oat, which is going to sell organic food at 20% less than the competition. If they start to gain some traction with that business, he thinks there will be lots of upside. Trading at only 15X PE.

Chart shows the financial crisis peak in 2008 followed by a very weak rally rebound from 2010 to 2011. It finally broke out of the old peak in 2012. There has a primary trend line running from 2013 to 2015, and a shorter chart shows that that primary trend line has been broken. However, the chart does show support at around $72. He wouldn’t be shorting this right now. Also, when you get a market this nervous, money tends to go into safe consumer discretionary areas.

It has a lot of margin pressures and is raising wages. They are putting the screws to their suppliers. The $70 area is the next support and then the next one is in the $50s. He could see a breakdown next year. Only get a half position if you like the company long term.

The fundamental problem is that they are so big that it is hard for them to grow. A lot of gas price savings have been saved instead of being spent at Wal-Mart. We still have not seen consumer discretionary spending pick up. The economy has become so good that people are spending money on big ticket items instead of at places like Wal-Mart. This should improve over the next couple of years.

This fits well into his categories. It could pull back to $64.25. He has a model price of $94.46, a 31% upside. This is one of the largest consumer discretionary stocks out there that is hitting 52 week lows.

Most of the business done here is not discretionary. In fact over 50% of the revenue derived is food. The person who shops here is the average American who is watching the budget and where lower gas prices are very, very meaningful. He is not sure management is doing the kind of job that would warrant him committing his clients’ funds to the Company. Not convinced this is a good place to be.

You had a chance to buy this when there was that Mexican bribery scandal, and the stock fell to $58. He would like to see one or 2 earnings misses or weaker than expected earnings before he got excited.

A consumer staples company, which is an area he tends to focus on during the summer. This is a component of SPDR Consumer Staples ETF (XLP-N). The trend has not been favourable as yet. Consumer staples has a period of strength from about the end of April all the way through to October. The huge strength of the US$ has obviously crushed some of these consumer staples companies.

Short? He likes the stock and thinks it is in the right space. There are lots of places where money is going to come in here. He would recommend not Shorting, but would be Buying instead.

(Market Call Minute.) She would rather own something that is much more focused on the US housing recovery, such as Home Depot (HD-N).

You are down at an area of major support that was pretty good resistance back in 2012. Don’t overweight this or any stock.

Chart indicates that it has been in a base since late 2012. Tried to break out late last year, but pulled back again. As long as support holds at around $66-$67 the stock looks fine. A lot of stocks and sectors are doing that right now. This is not a dangerous thing. If it starts to move up again, you could probably buy a little bit more. It looks okay.

Not an expensive stock and will continue to have dividend growth. They generate lots of free cash flow and are in a good space. They are faced with rising costs, especially in the labour front. Rising rates are going to have a big impact on their margins. He is expecting them to see some downside from here. Yield of 2.6%.

His feeling is that money is leaving the safe sector of the consumer, which includes the retail sector. Money is slowly leaving the consumer sector, and his feeling is that this company will go nowhere. 2.6% dividend yield.

The stronger US$ and the rising wages affected some of the results on a negative front earlier this week, causing a miss on both the top and bottom lines. 30% of their revenues come from outside of the US, so the strong US$ will affect their earnings. It is trading below its 200 day moving average, and at about 15X forward earnings with a 7%-8% long-term growth rate. This gives it a 2.7% PEG ratio. This is why he sold his holdings.