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Here’s Why Wal-Mart Stores Inc (WMT) is in the Spotlight

Wal-Mart Stores Inc (NYSE:WMTis in the spotlight today after Reuters reported that the company’s CEO, Doug McMillon, received a 13% bump in total compensation for the previous fiscal year, to $22.4 million. In addition, the Wall Street Journal recently reported that Wal-Mart is ‘investing heavily to lower prices in its U.S. stores’ with a major emphasize on lowering food costs. Wal-Mart’s move to trim food costs could be a defensive move to prevent Amazon from gaining market share in that category. The news of Wal-Mart Stores Inc (NYSE:WMT) being more aggressive in terms of discounting follows an earlier Recode report that stated the company plans to provide discounts of 3-5% on a variety of merchandise consumers order through but pick up at a nearby store.

Given Amazon’s massive rally in recent years, the market clearly expects the e-commerce giant to give Wal-Mart a run for its money in terms of market-share. If Wal-Mart can fend off Amazon, and maintain its profitability, CEO McMillon’s raise will be well worth it.

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).

Michael Larson‘s Bill & Melinda Gates Foundation Trust was among the 54 elite fund holders of Wal-Mart at the end of Q4, reporting a stake of 11.6 million shares at the end of 2016. By comparison, 71 top funds were long Wal-Mart at the end of Q3. Those numbers are out of the 742 total elite funds we track.

The Bottom Line

Wal-Mart Stores Inc (NYSE:WMT) CEO has received a raise and the company isn’t giving up in its war against Amazon and other competitors, with the retailing giant investing substantial capital to lower its prices even further (per sources), with a major focus on making groceries even more affordable. For more reading, check out ‘11 Largest Grocery Chains By Revenue in America‘.


economy, retail, business, shopping, store, wal mart, united states

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