Tuesday, February 21, 2012

Wal-Mart Misses While Hitting

The Wal-Mart headline this morning masks the good news with the bad news.

The article below echoes the sentiments of others featured on business news websites this morning, all of which detail how Wal-Mart has missed their quarterly margins and now, as a result, their share price is sinking to the tune of 3% as I write this.

In reality, the company is actually up $.17 billion ($170,000,000) in net profits from this same time last quarter despite having lowered prices on many items across the country, opening at least a dozen new stores in the United States alone, hiring more employees and paying many higher salaries as a result of raises, and wooing many shoppers back from the dollar and thrift stores that so many ran to at the start of the recession. Whew! Seems like they've actually done quite a lot this past year, and traditionally, they seem to lose a little bit during that final Q4 of 2011 when many shoppers turn to Toys R' Us, Home Depot/Lowers, and specialized retailers for gifts, decorations, etc.

I interpret this the opposite way; a huge win for a giant company whose stranglehold on the market might be a loosening a bit, but all for the better. I see no negativity in this news, and see them only expanding and improving again quarter over quarter and year over year. Invest here for long-term payouts, NOT short-term. I'm calling a $65.00 price by June 2012, possibly $70 by December of this year, especially if a Republican comes into office in November and promises lower corporate tax rates, etc., which would be great for a company like WMT.

I have no stake in the stock nor any conflicts.


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