Wal-Mart Stores, Inc. (WMT), Target Corporation (TGT): Sell these Three Companies Before a Drop

Page 1 of 2

As the North American economy recovers, companies such as Dollarama, Wal-Mart Stores, Inc. (NYSE:WMT), and Target Corporation (NYSE:TGT) will likely have a hard time raking in the profits to which they were accustomed during the recession.

Wal-Mart Stores, Inc. (NYSE:WMT)

Dollarama earnings fall

On June 12 Dollarama reported its fiscal first quarter earnings, which were off of analyst predictions for the first time since the firm’s IPO in October 2009. The median estimate was for the company to come out with earnings per share of CAD $0.67, but the company reported CAD $0.62. In the 14 previous quarters, the Canadian company beat analyst expectations.

According to Edward Jones & Co. analyst Bobby Hagedorn, increased expenses were the main reason for the sour performance. “It was a disappointing quarter. The biggest surprise for us was the operating costs, which were way higher than what we expected,” he told Bloomberg. “They attributed it to costs from the increased pace of store openings.”

The previous steady growth for the company was a sign of the times, with profits soaring as a new class that was hard-hit by the recession poured into stores looking for deals. But now that those people are in more solid financial positions, Dollarama isn’t likely to see the type of profits it had in recent years. The company opened 21 stores in the first quarter, and 85 stores in the last year. These outlets cost a lot of money to set up and train staff, so expect Dollarama’s earnings to be down for at least the next three quarters, despite what may happen in the economy.

After reaching nearly $80 per share early in mid-May, Wal-Mart Stores, Inc. (NYSE:WMT) has stumbled to its current level of around $75 per share following a dim earnings report. Sales increased by just 1% in the fiscal 2014 first quarter earnings released in May. While management at the firm cited a delay in payroll tax and one less selling day than the same period last year as the catalysts for the poor performance, those could be scapegoats for the real reason: people aren’t bargain shopping as much. However, the report could be a one-off, as the firm is getting a hold on the grocery business and could drive up sales in that area in the months ahead.

Page 1 of 2

Biotech Insider Alert - $6 Stock To Hit $40

$200 Million Dollar Healthcare Hedge Fund's #1 Best Idea Right Now

The best healthcare hedge fund out there right now is one of the largest shareholders in this biotech stock. The fund returned more than 20% in each of the last 2 years with a virtually fully hedged portfolio, and it's sending out a BUY signal on this biotech stock. Get your FREE REPORT today (retail value of $300)

This is a FREE report from Insider Monkey. Credit Card is NOT required.
Comments
Insider Monkey Small Cap Strategy
Insider Monkey Small Cap Strategy

Insider Monkey beat the market by 52 percentage points in 24 months. Our beta is only 1.2 (don't click this link if beating the market isn't important to you).

Lists

The World’s Most Famous Circuses

Best Hair Stylists

Most Popular NASCAR Drivers

The Best Romance Movies of all Time

The Most Wanted Drug Lords

The Oldest Money Managers

The Greatest Directors in the World

Largest Animals in the World

World’s Most Expensive Desserts

Best Selling Comic Books of All Time

A-list Actors who Sabotaged Their Career

Rappers With a College Degree

The Best Jazz Albums of all Time

The Most Influential Jazz Musicians

The World’s Most Famous Photographers

The Best Oscar-Winning Songs

Most Influential Choreographers Ever

Most Expensive Department Stores in the World

The Most Expensive Stolen Paintings in the World

The World’s Most Expensive Teas

Top Oscar Record Holders

The Most Expensive Flowers in the World

Countries With a Booming Film Industry

Most Expensive Cupcakes in the World

Uncommon European Escapes

The Most Stolen Artists in History

Best Travel Destinations in Australia

World’s Most Expensive Musical Instruments

World’s Most Famous Animals

Most Expensive Cakes in the World

Most Expensive Kosher Champagne in the World

Most Expensive Kosher Wine in the World

The Most Surprisingly Dark Fairy Tales

Most Popular Travel Destinations in Asia

The 10 Most Expensive Dresses Ever Worn to the Oscars

World’s Most Visited Art Museums

Best Countries for Photographers to Work in

Best Paid Jobs in the Film Industry

The Most Renowned Recovered Paintings Ever

Child Stars That Turned out Just Fine

Books That Were Banned in the Past Century

World’s Richest Dancers

Best Remedies against Bad Breath

Foods That Improve Your Skin Texture

Best-Selling Children’s Books of all Time

Foods That Boost Your Libido

Best-Selling Books of all Time

The Most Expensive Academy Awards Jewelry in History

Most Expensive Japanese Restaurant In New York City

The Best B-Boy Movies

Subscribe

Enter your email:

Delivered by FeedBurner

X

Thanks! An email with instructions is sent to !

Your email already exists in our database. Click here to go to your subscriptions

Insider Monkey returned 129% in 2.5 years!! Wondering How?

Download a complete edition of our newsletter for free!