As I'm typing this, WMY is holding at 83+ and showing no signs of dipping much more. I'm wondering if I'm going to miss by chance to get in while the gettin's good by holding out for an $80 purchase price.
For years Walmart was the sleepy mature stock that people bought for the dividend and as a defensive play during downturns. It was thought that they catered mostly to lower income consumers. During economic downturns, it benefitted from higher income consumers "trading down" to get the cheaper prices. But historically, when the economy improved, those higher income consumers would trade back up. But I don't see those trade-ups happening again the the future.
Walmart spent years investing heavily in its e-commerce platform. They also completely revamped their grocery merchandising to carry more items that are popular with higher income consumers and have become much more nimble in meeting changing demand. Additionally they kept building Supercenters at a rapid pace, which now double as local delivery warehouses, during periods when others were scaling back on brick and mortar capacity.
Now it is all starting to pay off for them. Even at its current price, well down from the YTD high, it is up 39% from just one year ago. It's stock is now trading at multiples more reminiscent of a tech company.
Their delivery service for basics like groceries and other products has become so good that nobody can compete with them. Same day in most of the country courtesy of the vast network of Supercenters, often within a couple of hours if you want to pay up a little, at the same prices they charge in store.
Amazon has already conceded that they would need a massive buildout of infrastructure to compete with Walmart grocery delivery. Smaller grocery stores are trying using services like Instacart, but given that they are already more expensive and Instacart needs to mark the food up yet more, I don't see that as a winning long-term strategy.
Just brilliant. What Walmart has done will one day be a classic B-School case study.
The best part is that, since 60% of Walmart's sales are now grocery and 80% of the U.S. grocery supply is sourced domestically, almost half of its sales are already buffered from tariffs. To the extent that the other 50% of its sales are impacted by tariffs, Walmart is uniquely positioned to force suppliers to share the pain.
I'm sorely tempted to bite the bullet and pull the trigger now. Mark my words, I think that this stock will be trading at $150 within a few years as the company continues to further expand its grocery and other product delivery reach.
Buy it, it’s not bad there are better plays by you’ll see some growth. BTW dont count on groceries being 80% tariff free, still plenty of foreign goods in your local grocery and Walmart is no different I think it might be worth a shot