Buy 1/4 WMT at $53

While Warren Buffett more than doubled his holdings in retailer Wal-Mart during the quarter ending Sept. 30, according to the latest filings with the Securities and Exchange Commission (SEC), I have only sat pat. Buying 1/2 of my target position in 2 buys this year.

On 1/22 I bought 1/4 of my target at $48 per share and on 4/24 I added another 1/4 of my target position at an even lower $47.85. With a dividend of nearly 2%, WMT still beats out most places to store cash.

The, S & P and Market Edge have their highest rating on the stock.

The Good on WMT
Unemployment is expected to remain at over 10%  next year*, so many consumers will be shopping at discount stores. The company has strength in revenue growth, eps, has good valuation leves , good cash flow and net income is still  increasing.
The Bad on WMT
The downside is “poor debt management” as S&P states in  it’s November 29th report. Total Debt has increased from $47 B to $47.3 B while sales had increase over $1B over the same time period, FY Q3 08 to FY Q# 09. They add, the key liquidity measurements indicate that the company is in a position in which financial difficulties could develop in the near future.

The Ugly on WMT
I do not see any long term ugly on this stock.

I believe the upside far outweighs the downside on this stock, therefore I am adding 1/4 of my target position at $53/share.

*source: The Financial Forecast Center

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