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Walmart - A Great Company, A Stagnant Stock

|Includes: Wal-Mart Stores, Inc. (WMT)

     The great retail giant, Walmart, went from under $5 a share in the 1980's up to $69 a share in late 1999.  This was a reflection of their aggressive expansion during this time as they dotted the map with new Walmart stores and Sam's Clubs across the USA and into international markets.   However, since the beginning of the decade, Walmart's stock has been stuck in a range from about $43 to $60.  It has turned into a steady, stable dividend paying stock. 

     It would have been great to own Walmart during this recent downturn as investors shifted money into safe havens from late 2007 until the beginning of Sept. 2008.  The dividend pays a little over 2%, similar to the average yield on a 1 year CD.  If that doesn't sound worth your investment - I have an alternative for you:  Sell the September 42.50 put options for .97.  This is a bet that Walmart's stock will not fall below $42.50 which it hasn't in the last decade and I don't see any reason why it would now.  This out of the money PUT will most likely continue to lose value until it's Sept. 2009 expiration date.  Close the position when the option reaches about .15.  This will give you an 84% return on your money. 

     If the stock actually falls below $42.50 by expiration then you will be assigned the stock and own it at that price.  Not a bad deal either way.