Last week, an extraordinary event took place in Bentonville: Wal-Mart (NYSE:WMT) hosted a meeting for journalists in an attempt to generate some positive vibes in the press. The company has historically mixed it up with the financial media only twice a year -- once at its annual shareholders meeting in the spring and then at a more focused conference just for securities analysts in the fall. But never before has the company brought in a pack of journalists for the express purpose of saying what a good company it is. Makes you wonder what's going on when the world's largest company feels the need to dress up the smiley face and have it dance a jig for the media.

"Our stock price will track our performance" -- that's been the mantra of Wal-Mart senior executives going all the way back to the days of founder Sam Walton. The meaning is clear: The market will reward sales and earnings growth. The problem is that for the past few years, that hasn't happened. Since April 2003, the Dow is up 27%, Target (NYSE:TGT) is up 57%, and Costco (NASDAQ:COST) is up 42%. Over those same two years, while Wal-Mart has grown sales by 24% and earnings per share by 37%, its stock is down 11%. The trailing P/E ratio has fallen from 31 to 20.

I've waited a few days to comment on the meeting because I wanted to see the press reaction. It's been pretty blah overall. Most of the articles I've read comment on the unusual nature of the meeting, offer a few quotes from company executives, and then proceed to recount the litany of bad press Wal-Mart has received in recent months -- not a reaction that's likely to warm the heart of CEO Lee Scott. But what did he expect, really? The company is just too big a target -- no pun intended.

I suggest that, aside from the influence of the press, there are a couple of possible scenarios for the stock's decline over the past two years. At $285 billion in sales, Wal-Mart may now be simply a proxy for the U.S. economy, without the diversification benefit of owning an index fund. If this is the case, then with the company's current trailing P/E of 20 slightly higher than the S&P 500's at 18, we can expect the stock to generally track with the market, and no amount of public relations effort is likely to cause a material change in that relationship.

The second scenario is more intriguing. Wal-Mart stock over the past two decades has tended to move in spurts. From 1993 to 1998, the five years following Walton's death, the stock was basically flat. Then from 1998 to 2000, the stock more than tripled in value. Now we are experiencing another five-year period of flat stock price. Does that place us at the beginning of another upward move? Can the market ignore performance forever?

Only time will tell which scenario is right. But I am reminded of the words of Warren Buffett: "Be fearful when others are greedy, and greedy only when others are fearful." Well, the market is fearful of buying Wal-Mart right now. I'm feeling like a lemming these days, so I'm not inclined to jump in. But I'm also watching the market sentiment on Wal-Mart. A contrarian view would say that when a great company is out of favor, the time could be right to start averaging in. And perhaps a lovefest is just what the smiley face needs after all.

For other foolish views on Wal-Mart, see:

Fool contributor Timothy M. Otte is considered the original stock market lemming. He also owns shares of Wal-Mart. The Motley Fool has a disclosure policy.