Wal-Mart was the biggest gainer in the Dow in July, rising almost 7%. Despite the scandal in its Mexican operations, investors seem to be bullish on the company’s prospects.

One exciting aspect of Wal-Mart's future growth is the possibility that the retailer best known for its giant superstores and thousands of SKUs may be venturing into smaller formats. As The New York Times points out, Wal-Mart has been opening three different store formats: large supercenters, small Express stores, and medium-size "neighborhood markets" in places such as L.A. and Chicago. Can Wal-Mart outperform more seasoned urban retailers in these important new markets?

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