This week, Wal-Mart said it will be cutting hundreds of additional jobs and lowering certain online prices, but Wall Street still has mixed feelings about the retail giant’s long-term prospects.
On April 19, Wal-Mart will launch its new pickup discount program, which will offer customers lower prices on roughly 10,000 products they can buy online and then pick up at a local store. The program allows Wal-Mart to pass along the savings it generates from avoiding the “last-mile cost” of delivering products directly to customers’ homes.
At the same time, Wal-Mart is also cutting hundreds more jobs as part of its restructuring and refocusing efforts. Wal-Mart has eliminated about 18,000 company positions in the past year, but a spokesperson says many of the employees who held those positions have been retained and reassigned.
Last week, Telsey Advisory Group analyst Joseph Feldman upgraded Wal-Mart from “market perform” to “outperform” and said the company’s aggressive investments in e-commerce will eventually pay off for shareholders.
“Our forecast for accelerating growth following a few years of heavy investment to improve the core Wal-Mart U.S. and digital businesses should propel the stock higher over the next few years,” Feldman said.
Still, not all long-term investors are convinced that Wal-Mart has done enough to compete with Amazon.
Billionaire Berkshire Hathaway (BRK.A, BRK.B) CEO and Wall Street legend Warren Buffett has sold nearly all of his $3 billion stake in Wal-Mart since mid-2016. Buffett first bought his stake in Wal-Mart back in 2005.
“How many retailers have really sunk and then come back? Not Many. I can’t think of any,” Buffett said of Sears Holdings Corp. (SHLD) back in 2005.
At a shareholder meeting last year, Buffett said Amazon is “a big, big force” that has “already disrupted plenty of people and it will disrupt more.”
Wal-Mart and its stock are holding up surprisingly well in recent years considering the damage Amazon has done to the rest of the U.S. retail sector. The retail sector lost
Want to learn more about how to profit off the stock market? Or maybe you just want to be able to look sophisticated in front of your coworkers when they ask you what you are reading on your Kindle, and you’d prefer to tell them “Oh, I’m just reading a book about stock market analysis,” rather than the usual “Oh, I’m just looking at pics of my ex-girlfriend on Facebook.” For these reasons and more, check out my book, Beating Wall Street with Common Sense. I don’t have a degree in finance; I have a degree in neuroscience. You don’t have to predict what stocks will do if you can predict what traders will do and be one step ahead of them. I made a 400% return in the stock market over five years using only basic principles of psychology and common sense. Beating Wall Street with Common Sense is now available on Amazon, and tradingcommonsense.com is always available on your local internet!