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Raging Bull on Wal-Mart


Estimates may be coming down with share price.

Answer: Seven minutes and three swear words. Question: How long did it take me on Sunday afternoon to get my daughter's new Barbie out of the bullet-proof plastic wrapping it was in?

Asian markets were quiet. The Hang Seng was off 0.7% and the Nikkei was closed on holiday. Meanwhile European stocks were in negative territory earlier this morning. And here in the US, we're currently trading lower.

Here's what I'm focused on this morning:

Wal-Mart (WMT):
Fellow Minyan Justin Sharon points out that HSBC slapped an Overweight rating on the large discount retailer.

My two cents:

1. Some think I should get off my discount horse. But I believe that frugal consumers will be plentiful in the near run and that nobody's going to knock this company out of the box in the near or immediate term. This is why I'm a raging bull.

2. The "benchmark" (as I like to call the company) is expected to grow its bottom line more than 9% from this year to next. That's not child's play, especially for an organization of this size.

After the bell on Friday, the fertilizer company disseminated a release. Like many releases on a Friday after the bell, the news wasn't so hot: It basically lowered the earnings bar.

Per the release: "Potash Corporation of Saskatchewan Inc. (PotashCorp) today announced revised earnings guidance of $3.25-$3.75 per share for full-year 2009, shifting from a range of $4.00-$5.00 per share (1) provided in July 2009."

My feel:

1. It's not the end of the world, but that's a big drop. Now I'm wondering if that number is indeed doable.

2. With the Street at $4.16 a share, I think estimates may be coming down along with share price.

3. The $7.96 a share estimate that's out there for 2010 is a bit rich.

4. I'm not saying it's going to go there, but I'd be more interested if it were to pull back to the $70s.
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No positions in stocks mentioned.

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