Motley Fool Money is a one-hour weekly business show syndicated to radio stations across America. On our most recent show, host Chris Hill talked with our analysts about some stocks on their radar. You can catch this week's show online at motleyfoolmoney.com.
Chris Hill: Time to go around the table and talk about the stocks that are on our radar. Tim Hanson, let's start with you.
Tim Hanson: So I think everybody here knows me as sort of a guy who's interested in emerging markets, but a weird thing has happened over the past year. Emerging market stocks have gotten a lot more expensive compared to U.S. stocks, which have actually gotten cheaper over the past year.
So I have recently gone hunting for emerging market exposure via U.S. multi-nationals, and one that popped up on my radar that's pretty interesting is Wal-Mart
That said, Wal-Mart's international sales have doubled over the past five years, and if you look at its competition abroad like Carrefour and WuMart in China and Lien-Hua and the Brazilian big-box retailers and some others, they're trading an average of 12 times operating earnings.
So if you were to take out Wal-Mart's international segment and give it the international peer group average multiple, it looks like the stock should really be worth about 20% to 25% more today.
James Early: Tim, did you say WuMart?
Hanson: WuMart is the original Chinese knock-off of Wal-Mart,
Early: So there's Wal-Mart....
Hanson: ... and there's WuMart, yeah.
Hill: James Early?
Early: Chris, I'm going with Heinz
Seth Jayson: They didn't bid for 3Par, in other words. (laughter)
Early: Exactly. I was in Quebec this past winter with my infant son and all we could find was this Heinz organic baby food. So we bought a ton of it. We got back to the condo and when we tried to feed it to him, he wouldn't eat any of it. In every single thing, the No. 1 ingredient was tomato puree, tomato puree, so now we know where the residual goes.
Hill: Seth Jayson?
Jayson: I have a stock that both Tim and James will love. And it's Guess?
They're doing a ton of their business -- I believe it's now a majority -- overseas where the brand does very well. It gets higher margins and still has a lot of room for expansion. They also pay a pretty nice little dividend which has kept growing. So that's GES. I own it. We own it at Hidden Gems.
Wal-Mart is a Motley Fool Inside Value recommendation. The Fool owns shares of Guess? and Wal-Mart Stores. Heinz is a Motley Fool Income Investor recommendation. Try any of our Foolish newsletter services, free for 30 days. True to its name, The Motley Fool is made up of a motley assortment of writers and analysts, each with a unique perspective; sometimes we agree, sometimes we disagree, but we all believe in the power of learning from each other through our Foolish community. The Fool's disclosure policy looks great in acid-washed jeans.
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