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I don’t like Walmart. I used to work for a major supplier for Walmart. If you can’t learn to hate Walmart as a customer, I guarantee you will learn to hate it as a supplier. It has done more harm to mom and pop stores of all kinds that any other company – ever. The same goes for its treatment of suppliers. And for its employees and its customers. I will go out of my way to not shop there.
Having said that, as an investor, I love Walmart. You just can’t ignore Walmart. My wife and I own Walmart stock (NYSE:WMT), and we are quite happy to do so. As I am writing, I am watching Walmart’s share price move like a butterfly around the flower of it’s 52 week high, just over $79.00 USD. It opened this morning at $78.92 and is now at $79.05.
How can you ignore a company that is the third-largest employer in the world (2.2 billion) and is still growing? How can you ignore a company where you can buy almost anything from a bottle of aspirin to a ZZ Top CD to a pork tenderloin or a camping tent at 3:00 am as easily as at 3:00 pm? How can you ignore a company that has increased its dividend every year since 1974? That’s 38 years! The current annual dividend is $1.88. How can you ignore the company that has turned more of its shareholders into millionaires than any other?
The answer: You can’t. And, by the way, the only employers in the world larger that Walmart are the United States Department of Defense and the Chinese People’s Liberation Army, and Wally World is breathing down the latter’s neck.
FLASH: WMT is now at $79.28
Some folks have begun to think that Walmart is so big that it has reached its peak. But not everyone agrees. Some look for WMT shares to reach the high 80’s in 2013. Others look for it to double in value over the next several years. Personally, I look for it to split before reaching those heights. The last time Walmart stock split was in March 1999 when it had reached $89.75. It had split twice in the preceding decade and five times during the 1980’s.
You cannot ignore Walmart. It remained profitable through the 2008 financial crisis and has, in fact, increased profits in each of the last eight years. It had total sales revenues of $443 billion in 2012 and has its eyes on $500 billion in 2013. That’s HALF A TRILLION. I don’t know about you, but I can’t count that high.
How can you ignore a company that owns over a fleet of over 50,000 long-haul trucks? (I used to live near Bentonville, Arkansas, the home of Walmart. It seemed like every other truck on the highway was a Walmart truck.) How can you ignore a company that operates more than 10,000 stores in 27 different countries and is continuing to increase its footprint around the globe? How can you ignore a company that literally dominates ocean going shipments from China to the Americas? How can you ignore a company that continues to drive itself and its suppliers for innovation?
Walmart places increasing demands on its suppliers to decrease their carbon footprints. It was key to implementing RFID globally. It will drive the new technology of pass-through check-out, where the entire contents of your shopping cart are read and calculated without the need for a cashier. By the way, it is this type of technology that improves the company’s operating income. Walmart is determined to become the worlds largest supplier of mobile phones, and it is finding ways to bring the pricing down to levels of unheard of affordability. Add to that the online presence that WMT has created and you have a company that cannot be ignored.
That’s the kind of company I love to hate and I hate to love. I wouldn’t miss out on Walmart for the world. Oh yes, WMT is now trading at $79.32. Don’t ignore what may still be one of the best investment bargains in the world.
