If you were to read the reports about Wal-Mart's (WMT -0.15%) latest quarter, you'd be excused for concluding that the world's largest retailer is on the brink of extinction. But if this is the case, then why did Warren Buffett's Berkshire Hathaway (BRK.A -0.36%) (BRK.B 0.11%) just double down on the company's stock?

In one of The Motley Fool's most popular articles this month, my colleague Travis Hoium concluded that Wal-Mart "has begun to lose its cache with consumers and major holes are starting to form in its business."

Travis pointed specifically to the retailer's falling domestic same-store sales and the contraction in its international operating margin. In the three months ended April 30, U.S. comparable sales dropped by 0.4%. And on a year-over-year basis, its margins from stores overseas fell by nearly 100 basis points.

With this in mind, what explains Buffett's heightened interest in the company? As Motley Fool contributor John Maxfield discusses in the video below, there are three likely explanations.