With the recent run-up in stocks over the past year, I’ve been slowly exiting positions in my portfolio that I wasn’t 100% confident in and reducing the money I’ve borrowed on the margin and going to cash in anticipation of a medium-large drop within the next year (hopefully!). Wal-Mart stock is one of them.
Why I’m Selling Wal-Mart Stock
Retail is Ultra-Competitive
Retail is an extremely competitive space as consumers are pretty fickle. It’s just too easy to shop at Wal-Mart, or not.
Doesn’t Everyone just Buy Stuff from Amazon?
Online retailers like Amazon are killing it and it seems like fewer and fewer people are going to the actual store these days.
I recently went to Wal-Mart when I was in Canada over Christmas break and I didn’t like what I saw: messy, disorganized and just an overall stressful experience. It just didn’t seem worth the cheap prices.
I Like Global Companies
It’s very North-America centric. I generally prefer companies that are more global such as pharmaceutical or oil and gas companies.
High P/E, Low Growth Prospects
With a trailing P/E of 18.06 and a forward P/E of 16.82, it is quite “expensive,” especially for a retailer with low-growth prospects.
Thank You Wal-Mart!
I bought 70 shares of WMT 3 years ago for $59/share and sold it today for almost $89, for a profit of $30/share and a nice profit of $2100 or so.