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Actionable news in WMT: WAL-MART STORES Inc,

Wal-Mart Stores, Inc. (WMT): Intangible Perspective


Wal-Mart Stores, Inc. (NYSE:WMT) has had a rough go of it lately as its stock price has fallen by over 30% over the past year. Part of the reason for WMT’s underperformance has been due to concerns over higher employee training costs and other intangible investments the company is undertaking. From a long-term perspective, regularly readers know that we view these intangibles investments positively even if they have adverse short-term effects on the bottom line. We thought it would be a worthy exercise to dig a little deeper into the data on Wal-Mart. The punchline of this piece is that from a fundamental and valuation perspective, Wal-Mart looks tempting. However, its technical outlook currently makes this stock much less appealing in the short-run.

Investors are always surprised to found out a retailer like WMT is, in fact, a Knowledge Leader. And no WMT doesn’t invest in research and development, however, they do invest consistently and persistently in other intangible assets such as brand equity, employee training and codified information. And as we stated above, analysts are currently acting a bit short sighted in our opinion in the way they are responding to the news of further intangible investments. This most likely will lead to a catch-up period in the future when we would expect to WMT...