Walmart Inc (WMT)

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.

Has become a relatively slow growth retailer. A very large piece of their revenues are grocery based, and grocers are notoriously low margin businesses. This doesn’t interest him.

As a retailer to a lower demographic, they were supposed to get much of the benefit of lower gasoline prices, but they really haven’t seen it in any great degree. In addition, they have introduced a higher wage scale. This is not great for profit margins, so he has no plans to own this.

Well-run. Large cap and a blue-chip type of business to hold. Has pulled back a little bit from its highs. If the US economy does well this will be a beneficiary of that, particularly if the lower-end consumer comes back, as unemployment rates drop. They will also be a beneficiary of Target (TGT-N) leaving Canada.

His number 1 position. Consumer discretionary. With the cut in oil prices it will benefit.

Looked at this a while ago and came away thinking it is a company that is likely to do a little better into the future, but with the recent spike in price, that is probably priced in. This is a beneficiary of lower oil prices as it would lead people to spend some of their savings. The thing he has always worried about is that a very large percentage of their sales are based on groceries, a very low margin and tough business.

Thinks this is on the come back. Likes their positioning. US consumers have really held back in terms of purchases, and have been saving quite a bit. With more money in their pocket, we are starting to see same-store sales growth increase.

Historically this has really grown in line with the US GDP. They’ve most recently had their 1^st positive same-store sales in a few quarters. He thinks we are going to see a significant pick up from a little more money being in consumers’ pockets because of low oil prices. Stock has just broken out from a very long consolidation between $65 and $80. Expects there will be good dividend growth and better revenue comps. Relatively low risk. Yield of 2.26%.

A greater and greater percentage of sales (>50% now) are groceries and that is a tough, tough business with very low margins. They cannot pass through their input inflation. They are a company that is sensitive to the lower end of the economic scale.

(A Top Pick Sept 5/13. Up 7.35%.) This is the type of name that you are going to put in your portfolio that’s a core holding and it’s going to deliver decent returns of 7%-9%. Pays a decent dividend as well. However he is getting a little cooler on the name. Some of the healthcare costs have hampered the earnings. The cost of boosting their on-line presence is also hampering some of the earnings. Feels there is more competition coming from the dollar store segment, which is kind of a new thing, but is happening quickly. He is looking for other consumer staple names that might replace this one.

It has actually held up quite well relative to some of its peers. Thinks they will continue to gain traction given the price point that’s required for the consumer these days.

In a bad position from an economic standpoint. The lower end of the retail market is not doing well. 50% is groceries and that has very low margins. Their demographic is at the lower economic end. Same store sales have fallen in the last couple of quarters.