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Walmart in the long run

Summary (from latest annual report 2017, Fiscal year ends in January)

  • Total stockholders' equity : 77.79 billion USD
  • Market Cap is 217.30 billion USD ( last price of the stock is 71.65 USD)
  • Wal-Mart Stores Inc operates retail stores in various formats under various banners. Its operations comprise of three reportable business segments, Walmart U.S., Walmart International and Sam's Club in three categories retail, wholesale and others
  •  Total stockholders' equity has decreased from 81.39 billion USD in 2015 to 77.79 billion in 2017
  • Company has 6.8 billion USD in cash on account (from latest annual report)
  • In 2017 company has 36.015 billion USD long-term debt, short – term debt is 3.35 billion USD (In 2015 company had 41.08 billion USD long-term debt , short-term debt was 6.4 billion USD)
  • Company's revenue increased in 2017 to 485.87 billion USD from 482.13 billion in 2016
  • Net income in 2017 was 13.64 billion USD, Net income in 2016 was 14.69 billion USD
  • Wal-Mart’s capital expenditures are likely to exceed $11 billion this fiscal year
  • In 2017 company paid 6.2 billion USD dividend to its shareholders
  • Wal-Mart is a member of the Dividend Aristocrats, a group of companies in the S&P 500 that have raised dividends for 25+ years

 

Opinion about the company

Fundamentally it is a very good company and in the future we can expect its growth (Total debt is acceptable, big amount of cash on company's account, ROE is around 17 %).

 

WMT is very good opportunity for the long - term investors

Wal-Mart Stores Inc operates retail stores in various formats under various banners. Its operations comprise of three reportable business segments, Walmart U.S., Walmart International and Sam's Club in three categories retail, wholesale and others (from latest annual report 2017 - Walmart U.S. represents 64% of total revenues, Walmart International represents 24.1% of total revenues, Sam's Club represents 11.9% of total revenues). Walmart has more than 11,500 stores and clubs in 28 countries, under a total of 63 banners. The company operates under the Walmart name in the United States and Canada. It operates as Walmart de México y Centroamérica in Mexico, as Asda in the United Kingdom, as Seiyu in Japan, and as Best Price in India. It has wholly owned operations in Argentina, Brazil, and Canada. Walmart is the world's largest company by revenue, as well as the biggest private employer in the world with 2.2 million employees. Walmart is a family-owned business, as the company is controlled by the Walton family. Sam Walton's heirs own over 50 percent of Walmart through their holding company, Walton Enterprises, and through their individual holdings. It is also one of the world's most valuable companies by market value, and is also the largest grocery retailer in the U.S.

WMT consolidated net sales increased $2.7 billion or 0.6% for fiscal 2017 and decreased $3.6 billion or 0.7% for fiscal 2016 , when compared to the previous fiscal year. Net sales for fiscal 2017 were positively impacted by overall positive comparable sales and e-commerce sales and the 1.3% year-over-year growth in consolidated retail square feet. The positive effect of such factors was partially offset by a negative impact of $11.0 billion or 2.3% as a result of fluctuations in currency exchange rates and a $0.4 billion decrease in fuel sales from lower fuel prices at the Sam's Club segment. Net sales for fiscal  2016  were negatively impacted by $17.1 billion or 3.5% as a result of fluctuations in currency exchange rates and a $1.9 billion decrease in fuel sales from lower fuel prices at the Sam's Club segment. The negative effect of such factors was partially offset by 1.3% year-over-year growth in retail square feet, positive comparable sales in the Walmart U.S. segment and higher e-commerce sales across the Company.

Wal-Mart is a member of the Dividend Aristocrats, a group of companies in the S&P 500 that have raised dividends for 25+ years. According to some analysts WMT is one of the only companies with the financial strength to pose a credible challenge to Amazon’s quest of world domination (Walmart.com is the third-most visited U.S. retail website). Wal-Mart is introducing more mobile products that will enable it to compete on more even terms with the likes of Amazon. Moves like the recent acquisition of Jet are likely the closest it will get (at least in the short term) to its more online competitors addressing recent areas of weakness. Analysts believe that Wal-Mart’s ability to exceed earnings expectations sets it up for a higher earnings multiple and anticipate a 19.5% total return on the stock over the next year.

 

Technical analysis

As long the price is above this trend line and $65 this stock is in the "BUY" zone and  there is no indication of trend reversal. If the price falls on the trendline and if we get "bullish" confirmation candle it would be a very good entry point. Trend line represents very strong support level, if the price breaks this trend line( and $65) it would be a very strong "SELL" signal and we have a open way to $56. If the price jumps above $75 (short term resistance level) that would be a confirmation of "BULLISH" trend and open way to $80 and $90.

 

Conclusion

My opinion is that Wal-Mart is well-positioned to outperform peers in the brutal retail environment because of its scale, clout, logistical expertise, and focus. Bank of America/Merrill Lynch has added Wal-Mart to it's 'US-1' list of best U.S. investing ideas. Wal-Mart is a member of the Dividend Aristocrats, a group of companies in the S&P 500 that have raised dividends for 25+ years. According to some analysts WMT is one of the only companies with the financial strength to pose a credible challenge to Amazon’s quest of world domination. The fundamentals of the company are very good :WMT currently has a P/E ratio of 16.4, total debt is acceptable, revenue for fiscal 2017 was $485.87 billion (an increase compared to 2016), net income in 2017 was 13.64 billion USD, in 2017 company paid 6.2 billion USD dividend to its shareholders. My opinion is that WMT is very good opportunity for the long - term investors. As long the price is above this trend line,  this stock is in the "BUY" zone and there is no indication of trend reversal. If the price falls, every price in a range from 50 USD - 55 USD is a very good opportunity to invest in WMT, and investors will certainly earn at least 30% in some period in next 3 years. WMT stock price is correlated with situation in USA, global economic situation also affect on the price of this stock.

 

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