Jack, history tells us, that retail stocks lose their PE multiples faster than any other sector. Now WMT is the best one out there, so comparing them with Best Buy, KMart, Sears, Cicuit City, Walgreens, etc., is not totally a fair comparison. But keep in mind, a lot of people view Sears, with its 17 PE as over valued. And its obvious most view Office Depot over valued without the Staples deal.(PE was 25, before the major drop.)
Sears also tried to expand internationally, and basically abandoned it.
WMT exec was quoted as saying WMT will budget 400 million in capital expenditures for international. That's about 2 billion in incremental sales just to break even, and international is only doing about 5 billion in sales, with most of it coming from pretty saturated penetrations of Canada and Mexico. Currently WMT has about eight stores in all of South and Latin America. 400 million only buys you about 10 stores. I just don't see the short term affect of their international plans impacting the top and bottom lines.
Sam Walton, wanted to be the best retailer in America. And that's what he did. I'd never bet against Sam, but Glass is no equal.
The next six trading days I think will indicate whether my forecasted correction of 10-15% is valid. Good Trading. LF |
