Walmart Inc (WMT)

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.

His model price on this is $103.60, a 30% upside. The savings rate in the US is going up. Any sort of wage increases that the US people are getting, they are saving it or paying down debt, as opposed to spending at.

The law of numbers certainly factors into this company in a big way. It benefits when times are good but not as much when times are bad and people really hunt for bargains. This will weather through thick and thin, which is what you are really looking for. Their on-line presence is competitive and promising, and they have the infrastructure to pan this out. Today’s actions might give you an opportunity to pick it up.

This is such a big company it is difficult for them to grow meaningfully. They are all over the globe. There are still markets they haven’t penetrated or done as well such as China and Germany. It is so big it is really tough to continue to grow aggressively. He thinks there is definitely hope for this company if they can streamline their operations and find some growth. In the shorter term, it takes a while.

It has been a pretty tough retail environment for them. The focus is on costs and running pretty lean.

Great company. They keep buying back stock, which has pushed the insiders back up to a level they are not comfortable with, causing them to sell some of their shares. This is one that he always looks at, but always seems to miss it. Not sure that he would buy this at the current price.

Wal-Mart (WMT-N) or Amazon.com (AMZN-Q)? 16 PE ratio. The reason Amazon has a sky high PE is because they don’t have any earnings at the moment. Of the 2, Amazon would be his preference. It is one of his favourite names. One of the best moves he has ever done is moving away from old retail to new retail.

(A Top Pick March 25/14. Up 7.94%.) Last year this had been underperforming and management have been doing really good things. This is a defensive stock. He got out of this when it popped. If it went down to $79, he would probably look at this again.