What Did You Buy Today?

[fenders53]

(04-29-2020, 09:28 AM)Otter Wrote:

(04-29-2020, 09:18 AM)kblake Wrote: I just bought WMT. Its a reliable stock and one that will do well in any economy. Its down $4 today on rotation but I think this is a $150 stock by years end. COST also on my buy list.

Great company, but I don't see the value there. Trading at a decadal premium P/E of over 25, which is well above its 10yr average of 17.34. A reversion to mean over the next year would drop the price to ~$89/share. Earnings growth rate of only 1.58% over the past decade doesn't seem to justify the P/E premium. It's trading like a FAANG stock without the earnings growth to back it up, and with a total enterprise value of nearly half a trillion, the law of large numbers puts a cap on growth prospects.

Like AMZN, not a company I would ever short, but can't see buying in at these valuations. 

Money will rotate out of WMT and some of the over-hyped consumer non-durables when virus hoard frenzy ends.