The following video is part of our "Motley Fool Conversations" series, in which analyst John Reeves and advisor David Meier discuss topics across the investing world.
Over the next couple of weeks, John and David will be revisiting some calls they made on individual stocks of the Dow. Today, they're checking out Wal-Mart. This company is up an impressive 21% in 2012 compared with a roughly 4% gain for the Dow average as a whole. John and David thought Wal-Mart would trail the Dow over the next five years. So far, that's been wrong. Really wrong. The stock has been on a tear of late, up nearly 16% over the last three months, outperforming competitors such as Target, Dollar Tree, and Dollar General. The low-priced retailer has had some good near-term performance, reversing a string of negative domestic same-store sales. David is sticking with his underperform call, thinking the stock will not beat the market over the next five years. He does not believe the company has much more growth ahead of it and prefers a retailer like Costco instead.
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David Meier has no positions in the stocks mentioned above. John Reeves owns shares of Costco Wholesale. The Motley Fool owns shares of Costco Wholesale. Motley Fool newsletter services recommend Costco Wholesale. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.