Tuesday, 17 November 2015

Reiteration at Walmart equals good enough

Back in October I noted:

'I think capital growth investors wait for US$55 at today's newsflow.  Longer-term income/total return investors cannot really be criticised for giving a sub US$60 level a go so long as they have a 2-3 year minimum holding period in mind. 

Interesting times at Wal-Mart'

Today's update reiterates my views.  As I observed earlier on Twitter:

  numbers...still cash flow (and the fact they are returning it) is the key attribute. Stock up 2% odd to US$59

You can do a lot with a near 5% free cash flow yield...

Otherwise I noted that the combination of sluggish US comps (although only one is negative)...
 ...and patchy international growth (although four regions had higher gross profits and three higher sales) remains.

In short for a share which has suffered - as wonderfully shown in this graphic via Fast FT - a terrible time over the last year...

...this was good enough and I was not surprised to see the share pushing back over the US$60 level as I write.  For real value investors you wait - as aforementioned - for a 50-something print but those who did take advantage in October have started to be rewarded.  It will not be easy, nor a straight run as discussed in the previous linked article, but buying on a bad day here still makes sense.  

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