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Why Every Day Is Black Friday for Walmart

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Continued economic slump means consumers still shying away from higher-end chains.

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Guess what I have for lunch today? Yup – a turkey sandwich. Go figure.

Asian stocks got hit hard overnight. The Hang Seng and the Nikkei were off 4.84% and 3.22%, respectively. European stocks were in negative territory too, but only a smidge. And here in the US, we're currently trading lower.

Here's what I'm focused on this fine Friday morning (besides the early close):

Walmart (WMT):
It's "Black Friday" and this company's been fighting like a cornered wolf to bring folks through its doors. I think it's going to be very successful today and throughout the holidays. In fact, over the next few days, I'm speculating we'll hear some information about how it fared compared to last year, and am anticipating a favorable comparison. I'm also thinking that a sell-off in the broader markets today (as I write this, the futures are off pretty big) could create a decent opportunity.

Some other thoughts:

1. With unemployment sky-high and the consumer still trigger-shy, my sense is that the earnings beats will continue and that the current-year estimate is going to prove to be conservative.

2. I believe it's still too early to be bellying up to the higher-end chains, given all the uncertainty. The economic slump is affecting so many in the middle and upper-middle class, and it may alter their spending habits in a big (and possibly permanent) way. This could bode well for Walmart and other players in this space that I really like, such as Target (TGT).

Deere
(DE):
The economy that's become synonymous with farm equipment and a certain shade of green was out with its fourth quarter.

Excluding items, it earned $0.23, which is decent because the Street was at just $0.03.

My take:

1. Clearly it was a good quarter. And as far as the future goes, I remain an optimist. Could the near-term be a bit rough? As one-time presidential candidate Sarah Palin would phrase it: "You betcha." But I still think it generates some pretty solid earnings next year.

2. The estimate I'm seeing for 2010 is $2.65. I'm not sure it will hit that estimate because the year could be a bit tough for obvious reasons. But even if it doesn't, a few years out, the bottom line could really be roaring. This is why I've become a lot more interested in the company than I was last year around this time.

3.
I see a market sell-off as an opportunity for a nibble. Again, I have a long-term view here.

For my last take on the company, click here.

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Toyota Motor (TM):
Forget the gas, it's time to check the brakes.

The New York Times reported that it had to fix a slew of gas pedals.

This, coupled with an early-morning sell-off in the broader markets, could have an adverse impact on the stock in today's session. But I'm a believer in this company for the long term, and would prefer to put my chips in this pot than that of Ford (F). Sorry Ford bulls -- ideally I'd like it to come down to the low $70s.

International Business Machines
(IBM):
I just saw a line flash on my screen that the company could open down pretty sharply. Of all the above-mentioned stocks, this is the place I'd most want to be (or at least, the stock I'll be most focused on). With it trading at 12.9 times the 2009 estimate based on Wednesday's close, I think it's a "Big Blue" bargain.

Have a great day and an even better weekend!
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No positions in stocks mentioned.

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