What keep Wal*Mart's stock so stable?

Question

Is it because of their employee stock options that keep it so stable? By the looks of it, it wouldn't be a good stock to invest in anyway. It looks like it stays pretty much flat lined with an exception of a few ups and downs.

Answer 1

I don't know what chart you are looking at.  Walmart was in the mid 40's in January and now its at 60.  That's a pretty big gain.  Actually during this economic slowdown Walmart has been one of the best retail stocks to own.  Where do you think people shop when they are trying to save money?

Answer 2

In this economy, the sales of Walmart and Costco have gone up as people look for cheaper options....

At the same time JC Penny sales have gone down....

I guess that's the reason for the stable stock....

Answer 3

Wal Mart has a strong and efficient business model.  As the largest consumer retailer, Wal Mart has strong negotiating power.  It gets better prices even from the big guns like Procter & Gamble and Clorox.  It can also negotiate better credit terms.  If the average retailer's terms are net 20, Wal-Mart gets net 30.  On the other end, Wal-Mart doesn't extend any credit.  Customers pay for their merchandise before leaving the store.  Furthermore, Wal-Mart sells 70% of its product before the bill come do to their supplier.  So Wal-Mart is very efficient.

They also have excellent inventory control.  Inventories are updated daily based on register sales.  Tight inventory controls saved Wal-Mart lots of money when the economy took a dip.  Unlike other retailers, Wal-Mart reduced their inventories as demand slackened.  Retailers with overstock have to slash prices to move excess inventory which cuts into profits.  Wal-Mart sold its merchandise without special discounts thus earning more money from fewer sales.

Wal-Mart's business model is the secret to its stability, and it's the reason they will continue to do well in the future.

Answer 4

long history of stable earnings