The reason for all the excitement is Walmart's integration of JD.com which is expected to increase online sales for the retailer by 40% over the next year. And I think they can do it. In fact several analysts are estimating that the price of Walmart stock will eventually rise to $110 per share over the next 18 months. That's an almost 28% return. Add in the dividend and the total return exceeds 30%.
As a result, I'll be adding to my position in Walmart shares in the weeks and months ahead. Personally I think the time to buy these shares were last week as it broke above $82 but I'd really have to be nimble to have gotten these shares quickly. So my plan will be to put in a buy order at $83 per share to attempt to buy these shares on a pullback to support.
This often happens to companies as they get trapped into a new Darvas Box. While I can't predict the limits of any new box, a good estimate would be $82 to $90. That means for me a price of $86 is not where I'd want to buy. That would allow for a $4 profit potential and a $4 loss potential. That's not the ratio I would want. At $83 I'd have a potential loss of $1 and a potential profit of $7, and that's a great profit to loss ratio for entry. It also lowers my risk if I made a mistake and I'm wrong.
So I've placed these shares on the list of Best Ideas for this week. In fact I believe the analysts may be a little conservative and Walmart may achieve these benchmarks even earlier. Perhaps within the next 12 months.
(Summary) (Company) (Chart)
15 October 2017 Price $86.62 1yr Target $85.49 Analysts 29 Dividend $2.04 Payout Ratio 49.02% 1yr Cap Gain -1.31% Yield 2.35% 1yr Tot Return 1.04% P/E 20.84 PEG 4.43 Beta 0.32 | EPS (ttm) $4.16 EPS next yr $4.62 Forward P/E 18.77 EPS next 5yr 4.70% 1yr Price Support $21.71 Market Cap $257.71 Bil Revenues $490.01 Bil Earnings $12.73 Bil Profit Margin 2.59% Quick Ratio 0.20 Current Ratio 0.80 Debt/Equity 0.62 | 1yr RevGR 0.77% 3yr RevGR 0.65% 5yr RevGR 1.70% 1yr EarnGR -4.16% 3yr EarnGR -4.24% 5yr EarnGR -0.63% 1yr DivGR 2.04% 3yr DivGR 2.06% 5yr DivGR 6.49% ROA 6.30% ROE 16.70% |