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ValuEngine Weekly: WalMart And Retail Stocks

|Includes: DENN, FL, FLWS, GME, Group 1 Automotive Inc. (GPI), HGG, IMKTA, M, NFLX, OWW, PETM, PTRY, WMTN

Valuation Watch: Overvalued stocks now make up 60.15% of our stocks assigned a valuation and 20.93% of those equities are calculated to be overvalued by 20% or more. Twelve sectors are calculated to be overvalued--with six at or near double digits.

ValuEngine Index Overview

 

 

 

 

 

Index Week Open Friday PM Change % Change YTD
DJIA 18019.8 17985.2 -34.6 -0.19% 0.91%
NASDAQ 4889.99 4926.71 36.72 0.75% 4.23%
RUSSELL 2000 1223.1 1226.47 3.37 0.28% 1.81%
S&P 500 2096.47 2094.24 -2.23 -0.11% 1.72%

 

ValuEngine Market Overview

 

 


 

Summary of VE Stock Universe
Stocks Undervalued 39.85%
Stocks Overvalued 60.15%
Stocks Undervalued by 20% 15%
Stocks Overvalued by 20% 20.93%
ValuEngine Sector Overview

 
















Sector Change MTD YTD Valuation Last 12-MReturn P/E Ratio
Aerospace 1.16% 8.31% 8.87% 19.68% overvalued 4.16% 20.85
Medical 0.45% 5.59% 7.47% 14.31% overvalued 1.91% 32.63
Computer and Technology 0.05% 5.49% 4.15% 12.16% overvalued -1.17% 31.83
Consumer Staples 0.08% 3.16% 2.36% 10.37% overvalued 8.75% 24.72
Retail-Wholesale -0.08% 4.30% 0.30% 10.33% overvalued 7.24% 27.24
Multi-Sector Conglomerates 0.24% 4.48% 4.50% 9.04% overvalued 6.59% 19.23
Business Services 0.24% 7.04% 3.64% 6.47% overvalued 2.78% 25.43
Utilities 0.02% 3.52% 1.01% 6.41% overvalued 7.11% 21.77
Consumer Discretionary 0.16% 5.11% 2.10% 4.60% overvalued -0.45% 26.33
Finance -0.07% 3.90% 0.40% 3.99% overvalued 3.57% 17.85
Auto-Tires-Trucks 0.21% 8.52% 6.23% 2.54% overvalued -2.07% 15.31
Industrial Products -0.23% 5.41% 1.02% 0.29% overvalued -6.12% 20.46
Oils-Energy -0.94% 8.66% 2.28% 1.83% undervalued -26.04% 20.48
Basic Materials -0.11% 4.22% 3.25% 2.13% undervalued -21.43% 26.45
Construction -0.34% 5.36% 1.71% 3.15% undervalued -0.35% 26.21
Transportation 0.15% 4.42% 0.59% 4.32% undervalued 6.54% 21.70
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Wal-Mart Stores, Inc.(NYSE:WMT) is the world's largest retailer. They are engaged in the operation of mass merchandising stores, which serve their customers primarily through the operation of three segments, which are the Wal-Mart Stores segment, the SAM'S Club segment and the International segment.

The company made news this week by announcing plans to raise wages for full-time workers to a minimum of $10/hour by February, 2016. According to the company, with the increases to starting pay and across-the-board raises, average hourly wages for full-time employees will increase to @$13/hour.

CEO Doug McMillon noted that the company's reputation for poor labor practices had hurt WalMart and claimed that "we're strengthening investments in our people to engage and inspire them to deliver superior customer experiences."

The company has been under pressure from politicians, customers, media, and workers due to its low wages, the use of public assistance by employees, scheduling practices, etc. The changes to the company pay scale are expected to cost the company @$1 billion/year.

It will take a while to figure out the effect of the increased wages on the bottom line, but analysts note that the company already had to increase wages in many stores because they were paying below the minimum wage of $7.25/hour as set by the federal government

VALUENGINE RECOMMENDATION: ValuEngine continues its HOLD recommendation on WAL-MART STORES for 2015-02-19. Based on the information we have gathered and our resulting research, we feel that WAL-MART STORES has the probability to ROUGHLY MATCH average market performance for the next year. The company exhibits ATTRACTIVE Company Size but UNATTRACTIVE Earnings Growth Rate.

Below is today's data on WMT:


 

 

 

 

 

 

ValuEngine Forecast
  Target
Price*
Expected
Return
1-Month 83.71 0.22%
3-Month 84.39 1.04%
6-Month 84.40 1.06%
1-Year 85.77 2.69%
2-Year 90.18 7.97%
3-Year 73.00 -12.60%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Valuation & Rankings
Valuation 13.24% overvalued Valuation Rank(?) 31
1-M Forecast Return 0.22% 1-M Forecast Return Rank 68
12-M Return 11.58% Momentum Rank(?) 69
Sharpe Ratio 0.61 Sharpe Ratio Rank(?) 83
5-Y Avg Annual Return 9.28% 5-Y Avg Annual Rtn Rank 68
Volatility 15.09% Volatility Rank(?) 91
Expected EPS Growth 1.99% EPSGrowth Rank(?) 26
Market Cap (billions) 269.14 Size Rank 100
Trailing P/E Ratio 16.60 Trailing P/E Rank(?) 71
Forward P/E Ratio 16.28 Forward P/E Ratio Rank 53
PEG Ratio 8.35 PEG Ratio Rank 4
Price/Sales 0.56 Price/Sales Rank(?) 81
Market/Book 4.13 Market/Book Rank(?) 31
Beta 0.47 Beta Rank 79
Alpha 0.08 Alpha Rank 75

As a bonus to our Newsletter readers,
we are offering a FREE DOWNLOAD of one of our Stock Reports

Read our Complete Detailed Valuation Report on WalMart HERE.

Sector Talk--Retail/Wholesale

Below, we present the latest data on Retail/Wholesale stocks from our Institutional software package (VEI). Top five lists are provided for each category. We applied some basic liquidity criteria--share price greater than $3 and average daily volume in excess of 100k shares.

Top-Five Retail/Wholesale Stocks--Short-Term Forecast Returns





 

Ticker Name Mkt Price Valuation(%) Last 12-M Retn(%)
GPI GROUP 1 AUTO 83.47 -5.01 31.7
FLWS 1800FLOWERS.COM 10.36 6.19 101.17
GME GAMESTOP CORP 37.53 -9.82 5.42
FL FOOT LOCKER INC 55.08 4.47 39.8
IMKTA INGLES MARKET A 43.87 N/A 88.77

Top-Five Retail/Wholesale Stocks--Long-Term Forecast Returns





 

Ticker Name Mkt Price Valuation(%) Last 12-M Retn(%)
GPI GROUP 1 AUTO 83.47 -5.01 31.7
FLWS 1800FLOWERS.COM 10.36 6.19 101.17
GME GAMESTOP CORP 37.53 -9.82 5.42
FL FOOT LOCKER INC 55.08 4.47 39.8
IMKTA INGLES MARKET A 43.87 N/A 88.77

Top-Five Retail/Wholesale Stocks--Composite Score





 

Ticker Name Mkt Price Valuation(%) Last 12-M Retn(%)
GPI GROUP 1 AUTO 83.47 -5.01 31.7
GME GAMESTOP CORP 37.53 -9.82 5.42
FL FOOT LOCKER INC 55.08 4.47 39.8
M MACYS INC 63 3.97 18.11
PETM PETSMART INC 82.88 -1.05 28.96

Top-Five Retail/Wholesale Stocks--Most Overvalued





 

Ticker Name Mkt Price Valuation(%) Last 12-M Retn(%)
NFLX NETFLIX INC 474.6 152.16 10.83
DENN DENNY'S CORP 11.43 93.92 77.76
HGG HHGREGG INC 6.71 88.88 -30.47
PTRY PANTRY INC 36.66 68.19 165.08
OWW ORBITZ WORLDWID 11.54 66.36 30.99

Disclosure: The author has no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.