Whitney Tilson Praises Obama for Stock Market, Discusses Herbalife, Walmart, Wells Fargo

Tilson has not been positive about Walmart Stores Inc. (NYSE:WMT) as it is losing marketshare to online rivals such as Amazon.com Inc (NASDAQ:AMZN) at a rapid pace. He does not think that Walmart Stores Inc. will be able to successfully transform itself into a major online retail player to stop the marketshare losses. Though he thinks that Walmart Stores Inc. may look cheap from the P/E perspective, it could be a value trap due to low growth. Tilson thinks that Walmart’s move to increase employee wages is a positive not only for the company itself, but for the country as a whole. This move by the company came after low employee morale led to poor customer services and also may have been a factor in the company reporting a first decline in revenues during 2015. Tilson is not sure whether the company will continue to follow this strategy going forward if the economic situation or the top management changes. The value of positions held by the investors we track appreciated slightly to $6.86 billion from $6.83 billion, while the number of investors increased to 58 from 54 during the second quarter.

Wells Fargo & Co. (NYSE:WFC) is among the largest financial institutions in the USA with a market capitalization of more than $200 billion. Wells Fargo has been a favorite holding of Warren Buffett and has come out relatively unscathed from the 2008 crisis which saw the bankruptcies of major banks such as Lehman and Bear Stearns. However, Wells Fargo & Co. has been in the news for all the wrong reasons over the last one month as many of its employees defrauded thousands of the bank’s customers by charging them for services which they did not need or did not know about. This was a systematic issue at the bank and was driven by the company’s management pushing its employees to get customers to sign up for the overdraft service, even though it was against the interests of its customers. Tilson praises the Consumer Financial Protection Bureau (CFPB) for bringing this issue to light. He thinks that CFPB has played an important role in protecting customers from the illegal practices of the powerful financial industry which has paid out billions of dollars in fines in recent times. The number of investors that we track having a position in this stock declined by two to 88 between April and June, while the value of their holdings declined by 4.4% to $ 28.44 billion.

We also suggest to take a look at our compilation of the planet’s 10 most profitable companies.

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