NYSE:WMT
$53.35
(2/9 12:02PM)
+0.8%
| Open | $53.21 |
Mkt Cap | $201.7 Billion |
| High | $53.46 |
52Wk High | $55.20 |
| Low | $52.82 |
52Wk Low | $47.00 |
| Volume | 4.3 Million |
Avg Vol 10D | 15.6 Million |
WMT Stock Evaluation
As of the time of this report, there has been relatively little movement in price for WMT over the last week. Furthermore, there has been no revision to earnings expectations or guidance. Given these factors as well as those contained in our complete analysis, we do not have enough of a catalyst to necessitate a rating change. For more detail please read the rest of our analysis of WMT's valuation.
Recommendation Summary
At Ockham Research, we are always interested in understanding a company from a valuation standpoint, but even the most ardent value investor understands that there is more to the picture than simply valuation. So, we also apply a volatility studies for both the index and individual sectors. We utilize these tools in order to get a more complete picture of the investing environment. So, while most of our report highlights current valuation versus historical norms as well as peer analysis, there is still more going on behind the scenes.
In general, when sectors, in this case the Consumer Services sector, have outperformed the market we tend to be a bit more hesitant to recommend stocks in that sector. However, even though the stocks in Consumer Services have appreciated 44.8% in the last twelve months, we believe that WMT is not quite due for an upgrade. Please see the full report of underlying research for more of our rationale of keeping a rating of Undervalued for at least another week.
The price change since our last report of 0.04% since 01/30/2010 has little impact on our final outlook for WMT.
Also, there have been no meaningful adjustments in earnings expectations to report in the last week.
WMT Revenue
Cash earnings is the most important factor in our analysis, but it goes without saying that if a company cannot produce sales then there is no ability to generate cash flow. By that logic we look very closely at revenue numbers as our second most important factor in valuing a company's stock. We have established reasonable Price to Sales per share ranges based on historical data of the last 10 years. For, WMT the high and low end of the Price to Sales per share ratios are 0.74x and 0.58x respectively.
Notice that WMT's current Price to Sales per share ratio is 0.51x, which is quite a bit below what we consider a normal Price to Sales ratio for this stock. Given normal conditions and a price of $53.45, WMT is 24% below where we would expect to see it. This will beneficially factor into our final analysis of WMT as it is not often that this stock sinks to these levels.
WMT Cash Earnings
As the old saying goes, "Cash is King!" We look at reported Cash Earnings, but the main emphasis of our analysis involves stripping out non-cash events such as depreciation from our cash earnings analysis. This helps us view the cash flows more clearly. Nevertheless, an analysis of Cash Earnings (both reported and otherwise) is absolutely pivotal to assessing a company's value, and currently WMT is significantly below their historical average multiples of Cash Earnings, as calculated by our proprietary analysis. It is incredibly important to understand that for WMT, the current level of Cash Earnings compared to its historical levels helps identify where WMT is in relation to what the investing community was willing to pay for this level of Cash Earnings in the past. With a historical high Cash Earnings per share ratio of 14.90 and a historical low Cash Earnings per share ratio of 11.72, an investor can relate where value becomes optimal.
So what does "significantly below" mean when we talk about Price to Cash Earnings numbers for WMT? From the Ockham perspective, we are looking specifically at WMT to see if the market is recognizing the huge disparity between WMT's past stock price to Cash Earnings ratio to today's levels. At a difference of 27% below the average historical Price to Cash Earnings ratio, our view would be quite positive at this point. However, as with all metrics, we need to also take other factors into account when looking at WMT. While we view better Cash Earnings metrics as very important, if the market is slow to identify this value, or if Cash Earnings were to fall from these levels, we would become more neutral in our stance.
WMT Dividends
When determining a company's future prospects for success, Ockham Research sees analysis of dividend payments as a key additional factor. Even though it isn't imperative for WMT to shell out a dividend in order to receive a positive rating, it can be helpful to further our analysis.
The estimated annual dividend for WMT is $1.09 producing a current dividend yield of 2.04%. Much like our evaluation of Sales and Cash Earnings per share, we review dividend yields from WMT against the historic high and low levels over all available dividend history. Because dividends are a decision made exclusively by management, we view a healthy and rising dividend as a sign of confidence and strength. The highest dividend yield from WMT over previous years was 2.32% while the lowest dividend yield was 0.47%. If you are looking for some “bang for your buck” then a dividend yield of 46.24% above the historical median should be enticing. WMT receives a positive boost in our view because as you know, equity at its core is simply a claim on future dividends.
Closing Bell Has the Latest News on WMT
The latest news from business television and influential blogs is always available through Ockham's RazorWire, and this news is in relation to Wal-Mart Stores, Incorporated.
Our sentiment indicator, provided through the Motley Fool CAPS survey, suggests that investors are neutral overall towards WMT and think that it will generally perform in-line with the S&P 500. At present, Ockham has a valuation stance of Undervalued on WMT, as we could see significant price appreciation based on current fundamentals like cash earnings and revenue. In comparison to the other stocks that we follow, Wal-Mart Stores, Incorporated has seen more discussion in relation to its normal ranking among the group. Be aware that the news sources we track are focusing on this stock more often these days.
“… Walgreens has launched fresh ready made meals atst chain, surveys show 70% to 80% of us don't know what we're having for dinner tonight and WALMART wants a piece of that action. ... …”
Power Lunch Brings News Related to Wal-Mart Stores, Incorporated
As always, the latest news on WMT is available to Ockham clients through RazorWire, and it was mentioned recently on Power Lunch.
At present, Ockham has a valuation stance of Undervalued on WMT, as we could see significant price appreciation based on current fundamentals like cash earnings and revenue. In comparison to the other stocks that we follow, Wal-Mart Stores, Incorporated has seen more discussion in relation to its normal ranking among the group. Be aware that the news sources we track are focusing on this stock more often these days. Our sentiment indicator, provided through the Motley Fool CAPS survey, suggests that investors are neutral overall towards WMT and think that it will generally perform in-line with the S&P 500.
“… Travelers, at&t, WALMART and dupont are among the dow's 30 winners. > > ppl beat the street. The ceo will join us first on cnbc. Tyson foods smashing analysts' estimates. …”
See Why Wal-Mart Stores, Incorporated News Was Discussed on Fox Business
News has broken via the television and viral blogs regarding WMT, so investors should take an interest in learning what was said.
Crowd sentiment is neutral from the millions of opinions submitted through Motley Fool CAPS, which suggests most investors on their platform believe Wal-Mart Stores, Incorporated will perform just about the same as the index. As we analyze the results from RazorWire, one thing we do is rank each stock in terms of amount of news coverage. Recently, WMT has been less covered in the news compared to the rest of our universe of stocks. We consider WMT as Undervalued at the current price of $53.22. According to our methodology, this stock has appreciation potential based on current fundamentals which only improves if earnings or revenue surprise.
“… David: you say garmin and WAL-MART but also las vegas sans corporation in light of the president's latest comments why do you think it is a buy? > > I have that as a short. …”
Wal-Mart Stores, Incorporated Was Talked About by Countdown to the Closing Bell
Wal-Mart Stores, Incorporated is one of the thousands of companies that Ockham has news analytics on, and it was recently discussed on Countdown to the Closing Bell.
At present, Ockham has a valuation stance of Undervalued on WMT, as we could see significant price appreciation based on current fundamentals like cash earnings and revenue. Our sentiment indicator, provided through the Motley Fool CAPS survey, suggests that investors are neutral overall towards WMT and think that it will generally perform in-line with the S&P 500. When taking into account the amount of news coverage each stock normally sees as a percentage of the total, Wal-Mart Stores, Incorporated has actually sunk a bit in comparison to the others.
“… WALMART notifying the company it will be using another source for its automotive batteries. When WALMART turned the way it is not a good thing. Stock is down 24%. …”
Stay Current on WMT's News on Tech Trader Daily-Barron's
The latest news from business television and influential blogs is always available through Ockham's RazorWire, and this news is in relation to Wal-Mart Stores, Incorporated.
Our sentiment indicator, provided through the Motley Fool CAPS survey, suggests that investors are neutral overall towards WMT and think that it will generally perform in-line with the S&P 500. At present, Ockham has a valuation stance of Undervalued on WMT, as we could see significant price appreciation based on current fundamentals like cash earnings and revenue. When taking into account the amount of news coverage each stock normally sees as a percentage of the total, Wal-Mart Stores, Incorporated has actually sunk a bit in comparison to the others.
“… As Business Week reports, first Target (TGT) and now WAL-MART (WMT) have imposed strict limits on the number of DVDs any one customer can buy at one time. …”
Wal-Mart Stores, Incorporated Was Talked About by Tech Trader Daily-Barron's
The latest news from Tech Trader Daily-Barron's on WMT is available through Ockham's news analytics platform RazorWire.
Based on our methodology, Wal-Mart Stores, Incorporated should hold some appeal to value investors as we view it as Undervalued. The Motley Fool CAPS crowd believes this stock will perform generally in line with the benchmark, or in other words the crowd is neutral. We noticed recently that in comparison to all other stocks we analyze in the news; WMT has received less coverage from the financial media in business television and blogs.
“… Last May, there was tremendous buzz in the video game sector about news that WAL-MART (WMT) had begun rolling out a test of kiosk operated by privately owned e-Play to sell - and ... …”
Fast Money Looks at Balance Sheet of WMT
Investors in WMT should stay up to date on developments in the company's balance sheet. RazorWire has noticed a discussion of the balance sheet recently on Fast Money.
Crowd sentiment is neutral from the millions of opinions submitted through Motley Fool CAPS, which suggests most investors on their platform believe Wal-Mart Stores, Incorporated will perform just about the same as the index. We consider WMT as Undervalued at the current price of $53.38. According to our methodology, this stock has appreciation potential based on current fundamentals which only improves if earnings or revenue surprise. As we analyze the results from RazorWire, one thing we do is rank each stock in terms of amount of news coverage. Recently, WMT has been less covered in the news compared to the rest of our universe of stocks.
“… And always WALMART. > > of course. > > the earnings are a bit phenomenal up to this point. That's the difference. That's the difference last time and this year. …”
Its All About Earnings: Closing Bell Talks About WMT
In our methodology at Ockham we weight earnings performance heavily, so we always pay attention to earnings news coming from legitimate sources like Closing Bell.
Our sentiment indicator, provided through the Motley Fool CAPS survey, suggests that investors are neutral overall towards WMT and think that it will generally perform in-line with the S&P 500. When taking into account the amount of news coverage each stock normally sees as a percentage of the total, Wal-Mart Stores, Incorporated has actually sunk a bit in comparison to the others. At present, Ockham has a valuation stance of Undervalued on WMT, as we could see significant price appreciation based on current fundamentals like cash earnings and revenue.
“… WALMART got that big upgrade from goldman sachs. It was a valuation call, valuation because this stock was the second-worst performer in the dow jones industrial average since ... …”
There is Significant News on WMT:Among the Twenty Most Active Stocks in the News
Something important is going on with WMT today, as it is getting a lot of attention on business television and influential blogs.
At present, Ockham has a valuation stance of Undervalued on WMT, as we could see significant price appreciation based on current fundamentals like cash earnings and revenue. Our sentiment indicator, provided through the Motley Fool CAPS survey, suggests that investors are neutral overall towards WMT and think that it will generally perform in-line with the S&P 500. When taking into account the amount of news coverage each stock normally sees as a percentage of the total, Wal-Mart Stores, Incorporated has actually sunk a bit in comparison to the others.
“… Home depot and WALMART and cisco systems' positive territory. Hewlett-packard lower today. And take a look the widely helds in technology, all of them lower, across the board. …”
Closing Bell: WMT is Among Most Active Stocks in the News Today
Something important is going on with WMT today, as it is getting a lot of attention on business television and influential blogs.
Based on our methodology, Wal-Mart Stores, Incorporated should hold some appeal to value investors as we view it as Undervalued. We noticed recently that in comparison to all other stocks we analyze in the news; WMT has received less coverage from the financial media in business television and blogs. The Motley Fool CAPS crowd believes this stock will perform generally in line with the benchmark, or in other words the crowd is neutral.
“… come well off of its lows as well. Down 27 points though still. Should you be buying shares of WALMART after the largest …”