Walmart Inc (WMT)

Their quarter disappointed last week, though they did nothing wrong. Problem is that market expectations got too high. Harsh.

It reports Thursday, which should be positive, because consumers are shifting spending to buy bargains which Walmart has.

Fantastic superstore footprint, but also strong and growing online profile. Focus is on lower prices, which will be a magnet if consumer spending slows down. Stretched consumers will get biggest bang for buck. Yield is 1.38%.

Likes it for increasing third-party seller activity ahead of the holidays.

(A Top Pick May 26/22, Up 32%)

He targets this 13% lower than today's stock price. One of the best run companies in the world. Would not buy it now.

Needs to see a pullback. Economically sensitive. If the US consumer slows down, and there are signs of this, he may get an entry opportunity. 

Beautiful stores. Is doing much better than Target. Prices are rolled-back to pre-inflation levels, their in-store brands are improving, while their organic foods remind him of Whole Foods (don't laugh).

Last week, they reported sharply higher revenue and a big same-store sales beat and super earnings growth. At first, shares rallied, but then plunged as the conference call went on. Why? WMT delivered a great quarter: they raised their full-year forecast and they reduced inventories 5% including 8% in the US. All this means buy not sell. The market is confused, wrong.

A struggle to choose. He owns WMT. You get more defensiveness with the lower prices, as well as online exposure where WMT has made significant investments. 

COST has always had an expensive valuation, and always will. Selloffs are traditionally a good time to buy. Great assets and business model. There are a lot worse things to own than this one.

Pretty defensive name, especially if consumer's starting to weaken. Stock's done relatively well. You could take profits, but it's a good long-term hold with a nice mix of food and discretionary. Investing in online platform. Good investment in this uncertain environment.

Likes how they source their products and likes their grocery business. Surprised shares are in the $150s. That said, he owns Costco instead.

The question was comparing the two companies as an investment. Walmart is a very large blue chip company that is not growing quickly. He prefers Five Below which is growing faster. There should be a very quick payback in nine months. There is nothing quite like it. They have just under 1400 stores.

Undervalued. Its 4,200 stores are now an advantage over Amazon. He likes how WMT has managed inflation, their private label is excellent as is their delivery service, and yet shares have been flat. Makes no sense to him.

Prefers this to, say, Target, in discretionary. WMT is attracting higher-end customers. If the economy weakens, people will go long Walmart and short Target.