Market displays are flashing red this week, as the China inflation figures and the subsequent reaction by authorities there weighed on both commodities and equities trading markets reflecting the resurfaced concerns of an impending slowdown.  Even with the widespread sell-off, some securities were up this week thanks to company-specific news. 

One of those easy to spot green securities in a sea of red was the globe’s largest retailer, Wal-Mart (WMT), up soon after the company released third quarter earnings.  The covered call options financial results for the  period ended October 31^st and improved forward guidance impressed  wall street.  As one (1and1) may possibly expect, even so, it wasn’t the US consumers that induced the 9.3 percent year-over-year achieve in profits.  Somewhat, worldwide product sales which grew by 7.9 % assisted compensate for weaker US same-store product sales (the manufacturer only reviews them for individuals stores open at lowest a 12 months) which fell by 1.3 percent (the sixth directly fraction of decline).  Total income for the one fourth was $102 billion, up two percent from the year-earlier interval, and aided rpc_two_rpc by the Brazilian and Jap economies.  Net earnings was $3.44 billion, or 90 cents per share (ex a one-time tax benefit) and generallyon par with consensus estimates.

Going ahead, the company projected a profitable outlook – particularly when comparedto continuing weak US financial data.  Wal-Mart expects the bigtrends review of the 4th quarterUS comparable gross sales to be in profitable territory. It did leave open the chance for a lot more contraction as anticipated gross sales now vary  from a 1 % decline to 2 % increase.  The retailing giant is expecting for a relativelyrobust holiday shopping season, but continues to see its customers’ buying habits mirroring the continuing financial weakness.  On the quarterly conference call, Wal-Mart management stated that its shoppers are even now tilting in the direction of necessities instead of discretionary items. Additionally, Wal-Mart customers nonetheless make their acquisitions largely on periods they get their paychecks or government benefits.

That said, the company is THE retailing giant for this economic environment. It did increase the full-year guidanceas Wal-Mart now expects $1.29 to $1.33 in earnings per share in the 4th quarter; consensus estimates anticipated $1.28 in earnings per share.  Whilst the shares have trailed the industry for the calendar year, we continueto look at the stock as one of two excellent retailer plays (the other being Amazon.com) in a still challenging atmosphere for the consumer. 

In this environment, the low-price retailing giant helps make for a robust defensive investment.  Even though its stores present bargains for customers, its shares are likewise attractive for traders at only 12 times 2011 earnings estimates. Led by its worldwide segment, earnings growth in the subsequent few years may top 10 %. Justtoday, the retailing giant’s Chairman S. Robert Walton met with China’s Vice Premier and was quoted by the media as saying that Wal-Mart can increase its China invesment.

With the shares trading at a PEG of 1.2, we stay bullish.

amazon · bigtrends · covered calls · rockwell day trading · stocks · wal-mart

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