Is all the negative press Wal-Mart (NYSE:WMT) is receiving creating a buying opportunity?

To the not-so-casual reader, Wal-Mart seems to have a "Kick me" sign taped to its backside. The latest boot comes from a USA Today story that 120 workers were arrested on immigration violations at a Wal-Mart distribution center construction site. While it was a subcontractor that hired the workers, and the Wal-Mart contract clearly calls for legal workers, it's the Wal-Mart name that makes the story and the headlines.

The most widely covered story is local communities not zoning properties to accommodate Wal-Mart stores. But do a search at the website for Motley Fool Stock Advisor recommendation Netflix (NASDAQ:NFLX) using "documentary" and "Wal-Mart" as your targets. You get three DVD's (one from 2004, two from 2005).

Try this with other corporations. I did. Disney (NYSE:DIS)? No luck. I had to use CEO names before I got a single hit for News Corps' (NYSE:NWS-A) Rupert Murduch. The sheer number of current videos available on Wal-Mart says, "Big interest."

But is Wal-Mart's stock depressed because of this?

Well, look at a five-year chart that compares the stock performance of Wal-Mart, Target (NYSE:TGT), and Stock Advisor pick Costco (NASDAQ:COST). What you see is that Target currently stands just below a two-bagger, Wal-Mart is nursing a loss, and Costco falls in between. So on a peer basis, the stock is definitely lagging.

Does that mean Wal-Mart has necessarily been a flea-bitten dog of a performer over that period? Hardly! Sales for the completed fiscal year ended Jan. 2001 were $191.3 billion. They rose to $285.2 billion for fiscal year 2005. Net income went from $6.3 billion to $10.3 billion. Broad measures of performance like return on equity (ROE) have held steady around 22%, and return on assets (ROA) has remained at or around 9% (both ratios per last year's data).

So is the future dim at Wal-Mart?

Analysts expect Wal-Mart to increase earnings 14% annually for the next five years. When you compare Wal-Mart to Target and Costco on a PEG ratio basis -- which compares the stock's price (in terms of its price-earnings ratio) to its growth rate -- Wal-Mart and Target both post 1.2, which looks like a bargain compared to the 1.7 for Costco.

So this is the way it looks. Wal-Mart, currently in the middle of its 52-week trading range, was a glamour stock of old. For five years, the company grew admirably but the stock's performance stunk up portfolios. Investors were not willing to pay a high multiple for its growth. Now, with reasonable growth prospects still ahead, the stock is priced in line with at least one top-tier peer and well below another.

It is this observer's conclusion that Wal-Mart has paid a price on Wall Street for all the bad publicity -- especially over the last two years. In the future, the stock should be able to grow its stock price in line with its peers, according to its growth expectations. If it doesn't, at some point the stock will become an overwhelmingly compelling value investment.

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Fool contributor W.D. Crotty owns shares in Disney and News Corp. Click here to see The Motley Fool's disclosure policy.