David, that article is WRONG! They are not forecasting 400 million in sales, but rather 400 million in capital expenditures! I now believe wmt have finally issued a correction.
The cost of entry into these markets is extremely high, and even more difficult to establish a profitable market share. Sears has tried, and failed. Kmart has tried, and failed. Country by country, there exists several dominant and efficient retailers. Walmart will have to compete against, Metro, Carrefour, Contintent, Auchan, GB, Finac, InterDiscount, Aldi, Casino, Singer, Fegro, Vroom and Dressman, Dixons, Boots, Argus, etc., etc.
To say to investors, the key to growth is internationally, I believe is a strong warning sign, that domestic growth is waning. Walmart has been the best retailer in the world for the past ten years. And to date have not made a profit internationally, ex the recent Q, with a token 6 million dollars. Why? And why now, will they be able to obtain a profitable return?
Their international sales, are extremely small, and even if they grow at 32%, still does not justify a PE of 23, when the corp is only growing at less than 15%. This stock is over valued by about 30%, and I see it plunging in to the low 20's within the next 6-9 months.
Good Trading. LF (sorry it took so long to respond) |
