According to Recode, Wal-Mart Stores Inc (NYSE:WMT) plans to provide discounts of 3-5% on a variety of merchandise consumers order through Wal-Mart.com but pick up at a nearby store. Initially, the discounted items will cover around 10,000 products this month, but will later cover more than a million products by July. Wal-Mart is offering its customers discounts to gain/maintain market-share against Amazon.com, which many traders are pricing as basically an unstoppable e-commerce Goliath. On the account of the way Wal-Mart is set up, the company can offer those discounts due to the money it saves with logistics.
Wal-Mart Stores Inc (NYSE:WMT) executive Marc Lore said, “I’ve been thinking about this for a long time and feel lucky I’m someplace where I’m empowered to make these changes. This is us leveraging the unique assets of Walmart to drive costs out of the system and bring consumers lower prices”.
Wal-Mart bulls hope that having physical stores plus an e-commerce site will ultimately be an advantage versus the e-commerce only format that Amazon has currently.
What Does The Smart Money Sentiment Say?
At Insider Monkey, we’ve developed an investment strategy that has delivered market-beating returns over the past 12 months. Our strategy identifies the 100 best-performing funds of the previous quarter from among the collection of 700+ successful funds that we track in our database, which we accomplish using our returns methodology. We then study the portfolios of those 100 funds using the latest 13F data to uncover the 30 most popular mid-cap stocks (market caps of between $1 billion and $10 billion) among them to hold until the next filing period. This strategy delivered 39.7% gains over the past 12 months and outperformed the 24.1% gain enjoyed by the S&P 500 ETFs. Our enhanced small-cap hedge fund strategy returned more than 45% over the last 12 months and outperformed SPY by more than 30 percentage points over the last 4.5 years (see details here).
The smart money was a little less bullish on Wal-Mart in the fourth quarter. Of the 742 top institutions we track, 54 were long Wal-Mart Stores Inc (NYSE:WMT) at the end of December, down 17 funds from the previous quarter. The amount held also declined to $3.78 billion from $5.47 billion quarter-over-quarter. Michael Larson‘s Bill & Melinda Gates Foundation Trust was among the top holders, reporting a stake of 11.6 million shares at the end of December.
The Bottom Line
Wal-Mart Stores Inc (NYSE:WMT) is trying out new tactics to gain the advantage versus Amazon in the e-commerce market. For the still-dominant physical retailer, winning or stalemating the e-commerce front may very well decide how shares do over the next few decades. For more reading, check out ‘21 Cheapest Online Shopping Sites With Free Shipping‘.