4-Star Stocks Poised to Pop: Wal-Mart

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Based on the aggregated intelligence of 120,000-plus investors participating in Motley Fool CAPS, the Fool's free investing community, Wal-Mart Stores (NYSE: WMT), the world's largest retailer, has earned a respected four-star ranking. While five-star stocks have been the best performers, our data has shown that four-star stocks still outshine the market by a significant margin and shouldn't be taken lightly; conversely, low-rated stocks have woefully lagged the market average.

With that in mind, let's take a closer look at Wal-Mart's business and see what CAPS investors are saying about the stock right now.

Wal-Mart facts

Headquarters (Founded)

Bentonville, Ark. (1945)

Market Cap

$217.04 Billion

Industry

Super Centers

Trailing-12-Month Revenue

$397.38 Billion

Management

CEO Lee Scott Jr. (Since 2000)

CFO Thomas Schoewe (Since 2000)

Return on Equity (Average, Past Three Years)

21.4%

Competitors

Target (NYSE: TGT)

Costco (Nasdaq: COST)

CAPS Members Bullish on WMT Also Bullish on:

Microsoft (Nasdaq: MSFT)

Johnson & Johnson (NYSE: JNJ)

CAPS Members Bearish on WMT Also Bearish on:

Dell (Nasdaq: DELL)

General Motors (NYSE: GM)

Sources: Capital IQ (a division of Standard & Poor's) and Motley Fool CAPS. 

Over on CAPS, 1,125 of the 1,270 All-Star members who have rated Wal-Mart -- some 89% -- believe the stock will outperform the S&P 500 going forward. These bulls include TMFBreakerJava and nonothing2, both of whom are ranked in the top 15% of our community.

A few weeks ago, TMFBreakerJava wrote:

When times get tough, people look for bargains. They will find them at [Wal-Mart]. This is a bedrock business for the coming year. Hop aboard for superior returns.

An earlier pitch from nonothing12 in August follows that bullish line of thinking and taps Wal-Mart as the retailer of choice in a recession:

This is the perfect store for penny pinchers in an economic crisis. When Wal-Mart can offer products at considerably cheaper prices than anybody else, there is simply no competition for the cash strapped family facing rough economic times. In this type of market, [Wal-Mart] is a stock that one should buy.

What do you think about Wal-Mart, or any other stock for that matter? Make your voice heard on Motley Fool CAPS today. More than 120,000 investors are waiting to hear what you have to say. CAPS is 100% free, so get started!

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Fool contributor Brian Pacampara owns no position in any of the companies mentioned. Wal-Mart, Microsoft, and Dell are Motley Fool Inside Value picks. Johnson & Johnson is an Income Investor selection. Costco is a Stock Advisor recommendation. The Fool's disclosure policy always gets a perfect score.

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

  • Report this Comment On October 31, 2008, at 12:16 AM, courtneTHEgreat wrote:

    WalMart.... I was told to buy the store that you shop. I shop Food Lion and now WalMart. WalMart has everything! even food!!! but they do not have the saver-card gimmick....

    Last month, my WalMart and others changed the store appearance with a face lift. New paint and moving everything around... so I can hunt and discover thing I did not want to buy, but did.... Now, the store looks great, but that face lift was not FREE. While improving the store, the economy fell on its face! The recession is here and 401K's, housing issues and job loss are making people NOT buy as much this quarter. Would I be wrong to say Walmart is going to see less profit than last year AND the next quarter is going to be bad too? AND WalMart spent tons of money on that face lift.

    Come-on, Fool's, Do not press the Middle Class to buy now while you SELL; only to see Walmart hit $40 (a new low) and triggering the computer sales to start buying....

    WalMart needs to heal, just like the other companies. Now is the perfect time to SELL, not to buy. Remember, Harvard grad's are playing us like we are really fools!

    courtne-the-Great

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