Tuesday, August 7, 2012

"Wal-Mart Like Gold as Investors Seek Safety From Slowing Growth" (WMT)

All this Wal*Mart lovin' is making me nervous. Who will be left to buy?
The stock closed down 27 cents on Monday, in pre-market trade it is up 12 cents at $74.40, some ways below the $75.24 all-time high set last week.
From Bloomberg:
The world’s largest retailer is attracting investors who see its shares as a safe haven amid a slowing global economy and volatile growth stocks. With U.S. same-store sales improving after nine straight quarters of declines, investors are betting consumers will continue seeking deals at Wal-Mart and have driven the shares up 24 percent this year.

As a result, late last month Wal-Mart briefly became the world’s third most valuable company before slipping back into fourth place behind PetroChina Co. Wal-Mart fell 0.4 percent to $74.28 yesterday at the close in New York.

Now some investors are asking how much higher the shares can go. When consumers become more confident and middle-market retailers regain traction, investors may start looking elsewhere, according to David Abella, a portfolio manager with Rochdale Investment Management. 
“In some sense, it is like gold,” Abella said in a telephone interview. “It’s a safe bet in an economy like this. If you start to see other retailers do well or consumers appear more confident, then it is time to take gains and get out.”

The economy is recovering more slowly than some investors expected and some fear a renewed downturn, said Abella, who is based in New York. While that is not the likely outcome, when investors get nervous, Wal-Mart shares go up, he said.

The Rochdale Dividend & Income Portfolio fund owns 57,000 Wal-Mart shares, making the holding the fund’s fourth largest. Abella said he plans to hold the shares because Wal-Mart’s performance has been fundamentally sound and he expects the economy to remain sluggish this year. If the stock rises, he may sell, he said....MORE
Yesterday it was the WSJ's MarketBeat blog:
"Wal-Mart Shares at All-Time Highs: Will the Rally Continue?" (WMT)
Although, to be fair, MarketBeat got on the love train not long after we did in the mid $60's.