The price is quite cheap and the business prospects are still quite good. They have a solid competitive position in the physical store retail industry and lots of opportunity to grow in e-commerce.
The recent drop in price was due to comments made from the company regarding making large investments in e-commerce and employees which will have an impact on earnings for the near future. While the market viewed this as a negative, I feel this is a strong positive. The company needs to have a stronger e-commerce presence in order to maintain their dominance in retail. Using their massive infrastructure they seem to stand the best chance to compete against Amazon.com in e-commerce.
It seems that pure play retailers are at an increasing risk of being nonessential. With more consumers making purchases online and a few strong retailers such as Amazon.com and Walmart gaining more and more customers and getting increasingly aggressive with keeping costs down including shipping, it will be hard for other retailers to compete both Amazon and Walmart as well as others allow manufacturers to ship them product and they handle the orders and customer service. It seems that with this trend, most other retailers will not be needed. I expect to see more consolidation in retail and that Walmart will maintain a solid presence.
The recent price dip makes a great opportunity to get a piece of this strong company. I initiated a position today.
Hello to our blog readers 🙂
Jeremy was looking over my portfolio recently and thought I should comment on my holdings.
Last year, I decided to try my hand at investing by starting out with the ‘fake stock market’ as I call it, started an account with Marketocracy, but soon found their system to be very laggy with processing orders, so I decided to just follow up with my portfolio on Yahoo finance.
My methods of choosing stocks are mainly:
My first purchases were back in October of last year, (as some may speculate, usually a good time to buy in when stocks usually take a hit), started with 10 shares each of Walmart at 44.89, Hasbro at 28.65, and 20 shares of Silver: SLV at 133.87.
At the beginning of November, I grabbed 10 shares of our favorite hot dog, Nathans at 16.55.
At the beginning of February, I grabbed 15 shares each of Burger King at 26.01, and Kohls at 44.68.
Last month, I grabbed 10 shares of Petsmart at 19.17, 20 shares of Pepsi at 21.01, and 20 more shares of Nathans at 15.17.
This month so far, I’ve grabbed 20 shares of Ebay at 31.69 upon news of JetBlue using Paypal in their payment options, and also grabbed 20 shares of Yum brands this morning at 38.38.
As of this posting, I’m up over 13% overall… not too shabby for dabbling. 🙂
Full Disclosure: I do not own the following stocks mentioned above at the time of this article