What Did You Buy Today?

[kblake]

(04-29-2020, 09:32 AM)fenders53 Wrote:

(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.

I disagree. WMT deserves a higher multiple. I don't care about graphs or history. You can throw that all out. Stocks go up over the long term on fundamentals. And WMT is killing it especially on line. They are the 1 company that can compete with AMZN. Forward PE is only 16 which is cheap. There sales are the best they have been over the last 5 years.