|Bid||113.74 x 1800|
|Ask||113.94 x 1200|
|Day's Range||113.86 - 115.31|
|52 Week Range||85.78 - 115.49|
|Beta (3Y Monthly)||0.66|
|PE Ratio (TTM)||39.85|
|Earnings Date||Aug 15, 2019|
|Forward Dividend & Yield||2.12 (1.85%)|
|1y Target Est||111.31|
Walmart Inc. is reorganizing some of its leadership team in the wake of the decision to absorb Jet.com into its digital business. In the memo sent to associates, which was also sent to MarketWatch, Greg Smith has been named to head the combined supply chain team, which will bring together supply chain heads for grocery, e-commerce, fleet operations, and other business functions. Nate Faust, who had been leading the e-commerce fulfillment process, will help with this transition and then move to another post within the company, which will be discussed at a later time. Michael Dastugue has been named Walmart U.S. chief financial officer and Steve Schmitt, who is currently the CFO for Sam's Club, has been named U.S. e-commerce CFO. Brandi Joplin, currently chief audit executive, will take on the role of Sam's Club CFO and Todd Sears, currently assistant controller, will become chief audit executive. Ashley Buchanan has been named U.S. e-commerce chief merchandising officer. And Jeff Shotts, who is currently the e-commerce CFO, will now lead the U.S. marketplace business, reporting to Marc Lore. There are now openings for chief experience and strategy officer, chief product officer, and leader of the customer care team. Walmart stock has rallied more than 23% for the year to date while the Dow Jones Industrial Average is up 17% for the period. Read: Walmart CEO McMillon says the retailer has been playing ‘catch up’ in e-commerce
Over this decade, the freight industry has witnessed a steady queuing up of stakeholders within the market toward digitalizing their workflow, with the hope of improving visibility into operations and end-to-end transparency across supply chains. "The problem is not technology, it is the organization of the market," he said.
As retailers get in line to roll out their quarterly earnings results in the coming weeks, the sharp divide between the fortunes of some of the nation’s largest retailers will come into focus. Given the record number of store closings already announced this year, investors shouldn’t expect a whole lot of good news to come out of some of the nation’s largest merchants. Many analysts expect department store retailers like J.C. Penney Company Inc (NYSE: JCP) and Kohl’s Corporation (NYSE: KSS), for example, to continue to show deteriorating sales as they struggle to keep up with the shifts in spending.
Costco Wholesale Corp. (COST), the members-only, big box discount retailer, charges $60 for it's lowest level membership, the Costco Gold Star membership. This may seem like steep cost to buy things, but Costco uses a subscription model of business for three reasons. With several large supermarkets, Wal-Mart Stores, Inc. (WMT) Supercenters, Target Corp. (TGT), Sam’s Club, BJ’s Wholesale Club, and a variety of neighborhood groceries and farmer’s markets, Americans have lots of choice about where to spend their weekly food budget.
Hardly any online shopper could have missed the barrage of specials on Amazon's (NASDAQ:AMZN) "Prime Day". And hardly and Amazon stock investors could have missed it either.This is a specially invented holiday first started in 2015 -- Amazon's 20th anniversary -- to compete with the traditional "Black Friday" shopping hysteria following the day after Thanksgiving.InvestorPlace - Stock Market News, Stock Advice & Trading TipsEnding last Tuesday, Prime Day was extended to a 48-hour event that listed over 1 million items at prices marked down from Amazon's already rock-bottom prices. While many items on sale are likely loss leaders, meaning they are sold at below cost simply to attract web traffic, the ultimate goal is to grow the number of paying Amazon Prime subscribers.Membership to Amazon Prime, which offers free delivery on most items and a list of other perks, such as a variety of free online streaming videos, costs $119 a year or $59 a year for students. Analysts estimate that while regular Amazon customers spend an average $600 per year, Amazon Prime members spend an average of $1,400 a year.Getting listed as an Amazon Prime Day special can be an outright windfall for vendors. According to Amazon on Tuesday afternoon, with just hours to go before the close of Prime Day, "Worldwide sellers -- predominantly small and medium-sized businesses -- saw the biggest 24-hour sales day in Amazon history."Preliminary estimates suggest that the second Prime Day even generated $5.8 billion in sales. * 10 Best Cryptocurrencies to Keep on Your Radar With Amazon stock now trading near an all-time high of $2,010, giving it a market capitalization of nearly $1 trillion, the company is more valuable than the economies of many African nations. Can there be any upside left for AMZN shares? The Future of Amazon StockThe answer could be in how successful Amazon is in leveraging a few high-growth product categories. Top-line revenues will most likely continue to see double-digit growth. But, that alone may not lead to AMZN stock being able to meet and beat highly optimistic analyst earnings forecasts.Almost all of Wall Street is cheering Amazon stock on with consensus estimates and if all goes according to plan, they expect earnings to also grow by double digits. In fact, Jeff Bezos, Amazon founder and the world's wealthiest person even after he made the largest divorce settlement in history, has often commented that for AMZN to grow past the $250 billion annual revenue target, it will need to rely heavily on expanding sales of low-margin, generic items. These include t-shirts, tube socks and groceries.In short, Amazon's core top-line revenue driver will continue to be competing in the retail consumer market as an online Walmart (NYSE:WMT). However, low priced t-shirts and tube socks do not exactly deliver the juicy profit margins of Apple's I-Phone X. And they aren't necessarily the primary driver of AMZN stock in the bigger picture.Growing top-line revenues by offering rock-bottom prices is simple enough. But will that top-line growth actually trickle down to earnings? Bottom Line on AMZNSome areas that investors will focus on are a few select high margin businesses, such as Amazon Web Services. Already, their fastest-growing business unit, AWS provides cloud computing processing power and data storage on a pay-as-you-go basis, much like an electric utility. Initially offered in 2002, AWS sales for the first quarter of this year reached $7.7 billion. This was a 41% increase from the $5.44 billion a year earlier, and it slightly beat the $7.69 billion average analyst estimate. This massive growth in AWS makes it the dominant source of earnings growth for all of Amazon. That will be a tough number to beat.Amazon has also launched its in-house fashion line which, according to Cosmopolitan, is "pretty damn cool." Along with serving as an official retail outlet for pricey luxury items from designers such as Calvin Klein and Michael Kors, AMZN is clearly investing heavily in a number of high-margin businesses far removed from tube socks and t-shirts. * 7 of the Best Smart-Beta ETFs to Target Right Now The next quarterly earnings announcement for Amazon will be July 25. Over the last few years, Amazon stock has racked up an impressive record of surprising the market by announcing numbers exceeding estimates. Enthusiasm about the next earnings release is at a dizzying peak to the point that the market expects little short of Amazon announcing that it discovered a cure for cancer and found a solution to end global warming.However, many skeptics are starting to bail on AMZN stock and taking profits now. The slightest hiccup in the frothy Amazon story with earnings-per-share numbers actually falling a few pennies below analysts' forecast, and an utterly unthinkable scenario, could lead to a rapid de-frothing of Amazon stock's sky-high share price.As of this writing, Theodore Kim did not hold a position in any of the aforementioned securities. More From InvestorPlace * 2 Toxic Pot Stocks You Should Avoid * 7 Stocks Top Investors Are Buying Now * The 10 Best Cryptocurrencies to Keep on Your Radar * 7 Marijuana Penny Stocks That Could Triple (But You Won't Make Money) The post Is Amazon Stock Really Worth All the Hype After Prime Day Buzz? appeared first on InvestorPlace.
Toys “R” Us is getting back into business again. The company plans to open two new stores this holiday season.
(Bloomberg) -- Oyo Hotels and Homes founder Ritesh Agarwal will invest $2 billion to triple his stake in the SoftBank-backed Indian lodgings startup he established in his teens.Agarwal will buy shares from existing investors Lightspeed Venture Partners and Sequoia India, which will remain backers of the startup, the company said in a statement. The deal will value Oyo at about $10 billion and raise Agarwal’s slice of the company to 30% from about 10% now, people familiar with the matter said, asking not to be identified discussing a private transaction. The entrepreneur won support from banks and other financial partners for his deal, Oyo said.That valuation makes Oyo one of India’s most valuable startups, ranking after One97 Communications, the parent of digital payments pioneer Paytm. E-commerce giant Flipkart Online Services Pvt was acquired by Walmart Inc. last year in a $16 billion deal. Oyo, which provides accommodation to travelers from India and China to the U.K. and U.S., grew revenue more than four times in June from a year earlier. It now has a million rooms under its brand, of which more than 200,000 are in India.Agarwal founded the startup in his teens after dropping out of college and roaming India on a shoestring budget. The wild, erratic standards at hotels and guest houses he encountered inspired him to start the online service, and the brand now aims to provide travelers a consistent experience.Oyo mainly signs on hotel owners and then helps them upgrade everything from bathroom fittings to furniture and bedding, and then provides them standardized supplies like sheets and toiletries, and support to train their staff.It employs hundreds of people in the field who evaluate properties on some 200 factors, from the quality of mattresses and linens to water temperature. To get a listing, along with a bright red Oyo sign to hang street-side as a seal of housekeeping approval, most hoteliers must agree to a makeover that typically takes about a month. Oyo then gets a cut of roughly 25% of every booking. Rooms usually run between $25 and $85.“It is a very exciting time for Oyo right now as we make great living spaces come alive across all corners of the world from Texas to Tokyo,” Agarwal, who is also chief executive officer, said in the statement.He will carry out the transaction, which requires shareholder and regulatory approval, through an entity called RA Hospitality Holdings (Cayman), Oyo said.“We remain committed to supporting this world-class management team,” Mohit Bhatnagar, managing director of Sequoia Capital India Advisors, said in the statement.(Updates with valuation and stake from the first paragraph.)To contact the reporter on this story: Saritha Rai in Bangalore at email@example.comTo contact the editors responsible for this story: Edwin Chan at firstname.lastname@example.org, Colum MurphyFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.
As the political debate roars on, the numbers are clear: Even two full-timers at U.S. minimum wage can't keep a family of four above the poverty line.
Walmart de Mexico, Mexico's largest retailer, on Thursday reported a nearly 10% jump in second-quarter net profit, beating expectations as higher traffic partly attributed to Mother's Day and the summer season boosted sales. Sales at Mexican stores that have been open at least a year rose over 5%, signaling healthy performance for parent company Walmart Inc's largest overseas market by store count. Walmart brand stores in Mexico saw "robust" growth thanks to discounts tied to the summer vacation season, Mother's Day and Father's Day, the retailer said.
Against the backdrop of a stock market that is firing on all cylinders and surging to fresh all time highs, Walmart (NYSE:WMT) stock has likewise been firing on all cylinders. In 2019, Walmart stock price is up a whopping 23%.Source: Shutterstock That's a big number. To put that 23% gain through a bit more than six and a half months in perspective, if Walmart stock price was flat for the rest of the year and closed 2019 up 23%, 2019 would still be the stock's second best calendar year performance this century. * 7 Stocks Top Investors Are Buying Now The sizzling performance from WMT stock comes despite the broader retail sector having struggled the whole year; the SPDR S&P Retail ETF (NYSEARCA:XRT) is up just 4% year-to-date. Meanwhile, Walmart stock is trading at a decade-high valuation of 23 times analysts' average forward earnings estimate. Thus, one could very reasonably argue that retail stocks' woes and an extended valuation will catch up to Walmart stock in the back half of 2019, and ultimately cause WMT stock to lose its gains from the first half of the year.InvestorPlace - Stock Market News, Stock Advice & Trading TipsBut this thesis is flawed for three major reasons. Those three huge reasons are as follows:* Market and consumer economic fundamentals remain healthy, and support continued asset-price appreciation and healthy consumer spending for the foreseeable future.* Walmart has separated itself from the rest of the retail pack, and will continue to post better-than-average numbers for the foreseeable future.* Given the favorable backdrop and the company's enhanced growth trajectory, WMT stock warrants its presently inflated valuation.Consequently, I think the outperformance of Walmart stock will persist into the end of the year. I further believe that when all is said and done, Walmart stock price will be around $120 at the end of the year. The Macro Fundamentals Are FavorableThe macro fundamentals supporting not just WMT stock, but all consumer-facing stocks, are healthy today and look poised to remain healthy for the foreseeable future.Financial markets are heavily influenced by low real interest rates. As interest rates have crept lower in 2019, that has allowed equity yields to move lower, too, and stocks have benefited from significant multiple expansion in 2019. This dynamic will persist because the Fed now appears to be on a rate-cutting cycle which could last for several months. As long as this rate-cutting cycle remains in play, rates will remain low, and the market environment will remain risk-on and favorable for stocks.On the economic side, all the "slowing growth" that everyone is talking about is happening on the manufacturing side (we appear to be heading into a manufacturing recession, mostly thanks to U.S.-China trade tensions). On the consumer side, though, everything remains fine. Unemployment rates are at record lows. Wage gains are running at decade-high levels. The savings rate remains high. Household debt isn't a problem.Interest rates are low. Retail sales numbers have been strong. All of these favorable conditions should remain in play with the Fed now cutting rates, which should juice the economy and provide even more firepower to an already healthy U.S. consumer.So market and economic conditions are presently very healthy for consumer-facing names like WMT stock, and should remain healthy for the foreseeable future. Walmart Has Separated Itself From The Retail PackAlthough market and economic conditions have been healthy for consumer-facing stocks in 2019, certain consumer-facing stocks - namely, most retail stocks - have continued to struggle.That's because a majority of retailers are still struggling to keep up with the times. Many of them are attached to malls, which have continued to suffer from non-cyclical traffic declines. Many of them haven't built robust e-commerce businesses. Indeed, some of them don't even have an omni-channel presence. Most of them are also niche, don't have the resources to compete with Amazon (NASDAQ:AMZN), and have failed to invest meaningfully in their businesses.Walmart does not fall into any of those categories.Walmart is an off-mall retailer. It has a huge e-commerce business that is growing at a 30%-plus pace. WMT has a big, rapidly expanding omni-channel business that includes pick-up in-store and delivery. The company is not niche; Walmart has basically become an all-in-one retailer where consumers can find everything from electronics to clothes to groceries - and it has more than enough resources to compete with anyone in the world. It's taking those resources, and investing them back into its business through in-store remodels, enhanced web stores, and improved logistics.All in all, Walmart has separated itself from the retail pack. This separation will enable Walmart to succeed going forward, even as other retailers may struggle. Walmart Stock Is Worthy of Its Current ValuationWMT stock presently trades at 23-times forward earnings. That is the biggest forward earnings multiple this stock has received over the past decade. Indeed, the current 23-forward multiple represents a 30%-plus premium to the stock's five year average forward multiple of 17.5.From this perspective, one could very reasonably argue that WMT stock is overvalued.But that argument would misunderstand why investors have been willing to pay 23-times forward earnings for WMT stock today. The Walmart of today is much better than the Walmart of yesterday. Until recent years, Walmart had been a low-growth company with sluggish traffic trends, eroding margins, and strong competitive pressures from e-commerce. Today, though, Walmart is a faster growing company with healthy traffic trends, improving margins, and easing competitive pressures. The company is also innovating at a rapid pace, giving investors confidence that today's improved trends will persist over the next several years.Given these points, I reiterate that WMT stock is on track to close 2019 around $120, based on the idea that WMT's revenue is poised to grow steadily, while it has healthy margin drivers and strong profit growth potential over the next few years. The Bottom Line on WMT StockWalmart stock is up by a large amount this year. But its rally isn't over. Over the course of the next six months, the market and economic environments will remain favorable, Walmart's numbers will remain healthy, and WMT stock will continue to benefit from supercharged investor demand. This trio of tailwinds will ultimately propel Walmart stock close to $120 by the end of this year.As of this writing, Luke Lango was long WMT and AMZN. More From InvestorPlace * 2 Toxic Pot Stocks You Should Avoid * 7 Stocks Top Investors Are Buying Now * The 10 Best Cryptocurrencies to Keep on Your Radar * 7 Marijuana Penny Stocks That Could Triple (But You Won't Make Money) The post The 3 Big Reasons to Stick With Walmart Stock in 2019 appeared first on InvestorPlace.
To put it bluntly, retail is a bloodbath these days. Consumers have gotten fickler than ever, which has created an interesting environment for many retail stocks to operate in.Today, people want their goods when they want it and how they want it. This means that both physical stores and digital commerce need to be blended. Two-day and even one-day shipping is now the norm, while online ordering and pick-up have quickly become a default option for many consumers.Needless to say, a lot of retail stocks have buckled under this pressure. Store closures and bankruptcies dot the sector.InvestorPlace - Stock Market News, Stock Advice & Trading TipsHowever, not all retail stocks are being tossed to the wolves. In fact, several are getting it right. That includes the right tech and consumer experiences to compete in the new omnichannel paradigm. These winners are proving that investors don't have to ignore the sector completely, but they do have to be selective. Choose wrong and you could be staring at plenty of empty storefronts. * 7 Stocks Top Investors Are Buying Now Which retailers are getting the job done in omnichannel? Here are five retail chains that will be winners in the years ahead. Williams-Sonoma (WSM)When being a "foodie" and collecting kitchen gadgets weren't as popular as they are today, Williams-Sonoma (NYSE:WSM) was really the only game in town for it. If you wanted to find new kitchen appliances, high-end imported foods, and other now-common kitchen items, you had to go to WSM. Because of this, the retailer has built up a fanatical fanbase of customers.The best part is this fanbase tends to be older and more affluent than typical bargain shoppers. After all, if you're willing to drop nearly $12,000 on an espresso machine, you have some cash to spend. And they tend to transfer their love of the brand down to their children when they finally become adults.The same could be said for its other major brands like Pottery Barn and West Elm for home furnishings. WSM has managed to create a cohort of wealthy customers that are willing to shop there first before anywhere else. This gives it a monster edge over many other retail stocks.Williams-Sonoma has been an earnings machine -- especially in the world of omnichannel. It has been able to get people into its stores for demos and product help while making plenty of revenues online. Sales have grown by an annual rate of 6% per year since 2010, while earnings have grown 11% per year over the same time. And it has been sharing the wealth via a growing dividend. Today, WSM yields almost 3%.All in all, WSM stock has all the right ingredients to keep winning in the new retailing world. Five Below (FIVE)Dollar stores have been incredibly resilient in the face of rising online and omnichannel shopping. But dollar-store Five Below (NASDAQ:FIVE) isn't like your local Dollar General (NYSE:DG). The product is very different. That is, it's geared towards kids, tweens, and even college students. You're looking at toys, games, cheap tech gear and beauty items. Moreover, much of the product mix shifts as the season's change -- which adds a "treasure hunt" aspect to their locations and necessitates repeat customers.And customers are coming back in a big way.Because of its operating model and low-cost of goods, the funky dollar store has managed to turn sales into actual profits. New stores have an average payback time of just one year, while profits have compounded by over 32% per year since its IPO. That's torrid growth considering this is a budget retailer. And FIVE has managed to do all of this without debt. * 9 Retail Stocks Goldman Sachs Says Are Ready to Rip Given its focus on tweens as well as on-trend goods, the retail stock has a unique niche that can't be tackled by many other rivals. For investors, this position offers plenty of opportunities to grow into the future. Kroger (KR)The grocery business is pretty cutthroat to begin with. Margins tend to be thin, consumers fickle. For many retail stocks that have operated in the sector, bankruptcy has been a forgone conclusion. This is especially true now that e-commerce giants like Amazon (NASDAQ:AMZN) have entered the market.But Kroger (NYSE:KR) seems to be getting it right, albeit slowly. The firm has been able to leverage its scale as the nation's largest supermarket chain to make a serious go at the new world of omnichannel.This includes unveiling new order ahead options for its products, apps, a big partnership with Instacart, and other tech-oriented consumer experience products. Today, KR has more than 1,685 stores that offer order pickup locations as well as over 2,125 delivery locations for its groceries. That covers about 93% of its customers.These efforts have helped grow digital sales by more than 42% during the first quarter of this year. Meanwhile, Kroger has been copying Amazon and Walmart's (NYSE:WMT) playbooks and moving into so-called alternative revenue streams. This includes media and advertising, customer data, and other real estate investments. KR is on track to start producing some significant revenues this year. So far it crushed its latest earnings estimates and was able to increase its dividend by a whopping 14%.Though KR's moves are working at a slow pace, the grocery giant could be an interesting value among retail stocks. KR is getting it right, it's just taking time. At least you get paid a hefty dividend while you wait. Home Depot (HD)What housing crisis?That's the mantra for home improvement giant Home Depot (NYSE:HD). The retailer continues to see rising sales and demand for various home improvement products and services. And the reason is simple: HD has started to seriously court the next generation of homeowners.Thanks to generally low interest rates and looser lending standards, Gen X and Millennials are finally able to buy homes. But they are not buying move-in ready McMansions. They're buying fixer-uppers that require plenty of sweat equity, which means plenty of trips to Home Depot. Moreover, HD has courted these customers with new omnichannel operations, mobile apps, and customer service experiences.It's working in a big way. Last year, HD pulled in record profits and the streak is continuing this year. Sales for the first quarter of this year increased 5.7% to clock in at $26.4 billion. Earnings per share managed to jump by over 9%. Its continued moves into omnichannel have certainly helped on this front.With the continued revenue and EPS gains, HD has rewarded shareholders in a big way. Thanks to improved results, Home Depot unveiled a new monster $15 billion buyback program and increased its dividend by an insane 32%. And with interest rates set to drop further, more people could be able to buy a home. * 10 Best Dividend Stocks to Buy for the Rest of 2019 and Beyond All in all, HD's outlook could be one of the rosiest of all retail stocks. O'Reilly Automotive (ORLY)Grease monkeys and gearheads could give a flip about online and e-commerce sales. Both classic and modern cars require plenty of knowledge and specialized parts, many of which can only be found at your local auto parts store. Moreover, several maintenance issues require special disposal of waste. You can't just chuck old motor oil down the drain. That necessitates a trip to a physical location.All of this could help explain why O'Reilly Automotive (NASDAQ:ORLY) crushed the market last year.The retail stock has seen plenty of steady single and low double-digit earnings increases over the last few years as the economy continues to expand and miles driven increase. As long as the economy continues to clip at a steady pace, ORLY should be able to get the growth going.Another reason for its success is its management team. The stock is packed with insiders and family ownership. Because of this high ownership, management often takes more long-term views of investments and decisions. Yes, it's about improving quarter to quarter, but its more about building the company over the decades. And ORLY has done just that. During the recession, a decision to expand made the firm the giant it is today.With new moves to court professional garages and a $1 billion buyback now under its belt, ORLY continues to make the right moves in the new retail environment.At the time of writing, Aaron Levitt had a long position in AMZN. More From InvestorPlace * 2 Toxic Pot Stocks You Should Avoid * 7 Stocks Top Investors Are Buying Now * The 10 Best Cryptocurrencies to Keep on Your Radar * 7 Marijuana Penny Stocks That Could Triple (But You Won't Make Money) The post 5 Retail Stocks to Buy That Are Getting It Done appeared first on InvestorPlace.
The U.S. House of Representatives on Thursday passed a legislation to raise the federal minimum wage to $15 an hour by October 2025 - a big win for American workers and labor groups - even as the bill passing a Republican-controlled Senate remain unlikely. The bill increases entry-level wages for millions of American workers from the current $7.25 an hour - a level that has remained unchanged since 2009.
Walmart (NYSE:WMT) stock has taken off. Just since the beginning of June, the Walmart stock price has increased over 13%. Yet there's been very little news to support the rally of Walmart stock.Source: Shutterstock Indeed, the biggest piece of news over that period hardly seems bullish. As James Brumley noted last week, Recode reported that Walmart's e-commerce businesses are losing $1 billion a year. * 7 Stocks Top Investors Are Buying Now But that counterintuitively could be good news for Walmart stock. Those losses suggest all of the company's businesses excluding e-commerce are more profitable than its reported figures imply. A $1 billion e-commerce operating loss, at the guided 27% tax rate, suggests a roughly 26 cents per share headwind to earnings. The hit likely is even higher, given that management has noted that much of the losses are coming from India's Flipkart, where tax rates and tax deductions for losses are lower.InvestorPlace - Stock Market News, Stock Advice & Trading TipsAs a result, the impact of e-commerce losses on the company's EPS might be closer to 30 cents per share or higher. So Walmart's EPS, excluding its operating loss from e-commerce, would be closer to $5.15 this year rather than the current consensus estimate of $4.83.The problem at this point is that even that $5+ figure still leaves Walmart stock trading at 22.2 times its earnings, which is an awfully hefty valuation. That's a notable premium to the mid-teen P/E multiples that have historically been applied to Walmart stock.WMT stock isn't the only name that's benefited from that type of multiple expansion, and it's not the only one that's beset with these types of valuation questions. Indeed, in a market now at its all-time highs, there is no shortage of stocks in sectors like software and e-commerce that look too expensive.But Walmart stock highlights a growing trend outside tech as well. Right now, the market will seemingly pay any price for quality. The question is if, or when, that trend will break. The Obviously Expensive MarketOutside of the dot-com boom nearly two decades ago, it's difficult to remember a time when more stocks looked outrageously expensive. Most of the obvious choices - as is usually the case - are in tech, but not all.Beyond Meat (NASDAQ:BYND), for instance, trades at 25 times analysts' average estimate of its 2020 revenue. It's risen a stunning 153% from its initial close, on top of a 163% increase on its first day of trading.Shopify (NYSE:SHOP) has gained 134% so far this year, and trades at well over 20 times its 2019 revenue guidance. Another e-commerce play, Square (NYSE:SQ), isn't cheap, either.Snap (NYSE:SNAP) is unprofitable and valued at $20 billion. MongoDB (NASDAQ:MDB) has generated $300 million in sales over the past 12 months and has a market capitalization of over $8 billion.Those are just a few examples. There are dozens of stocks trading at over ten times revenue, even excluding early-stage biotech and pharmaceutical companies, which have little or no sales. Earnings multiples of 100+ aren't uncommon right now.Just a quick look around the market indicates that there at least are areas in which valuation doesn't seem to matter. And as good as these companies might be, it would appear to take something close to perfection for investors to get reasonable returns after paying these prices. That sounds a bit like a bubble, as many observers have argued. Walmart Stock and the Price of QualityBut somewhat quietly, similar valuation questions have risen among older, lower-growth names. Walmart's earnings multiples are the highest they've been since the financial crisis, by far. Again, this is a stock that for most of this decade has traded between 14 and 17 times its earnings.WMT stock isn't the only one. Microsoft (NASDAQ:MSFT) is targeting EPS growth in the range of 10% a year at best and now trades at something like 26 times next year's average EPS estimate. That multiple, too, seems to be the highest assigned the stock since the middle of the last decade, when the company's growth profile was very different.Walmart supplier Procter & Gamble (NYSE:PG) has executed an impressive turnaround. But it trades at 24 times forward earnings while analysts expect 6% profit growth next year. The shares of another consumer giant, Coca-Cola (NYSE:KO), tumbled after KO reported ugly Q4 earnings in February. Coke's pre-tax profits have declined over the past six years. Soda consumption is in the midst of a long-term decline, particularly in the U.S. Naturally, KO stock, too, is trading at an all-time high, with investors paying 23 times the average forward earnings estimate for it.Investors are paying whatever it takes right now to buy quality or something close to it. McDonald's (NYSE:MCD), Visa (NYSE:V) and Mastercard (NYSE:MA) all continue to soar and all sit at all-time highs. Even Home Depot (NYSE:HD), whose multiples according to market theory, should be dropping this late in the macroeconomic cycle, is following the trend.It's easy to look at the likes of BYND and SHOP and see a market "bubble," or something close to it, based on the multiples. But it's not just growth stocks that are receiving historically high - and questionable - valuations. What This Means for Walmart Stock Price - and the MarketThe question is whether these valuations can hold. And that question likely depends in part on a key factor: interest rates. Expectations are rising for a Federal Reserve rate cut (or two) this year. That puts investors in quite a bind.How, exactly, can an investor get returns? The ten-year Treasury bond yields a paltry 2.125%, with significant duration risk. (Duration risk simply means that if interest rates rise over that ten-year period, an investor won't be able to sell the bond at par, leaving her with the choice of keeping below-market rates or taking a loss.) Savings accounts and CDs (certificates of deposit) pay even less.Emerging market stocks, including Chinese issues, have significant risk. Europe's growth is meager. Even among U.S. issues, historically "defensive" sectors - notably healthcare and certain kinds of real estate - aren't as safe as they used to be.In that environment, choosing quality and ignoring valuation makes some kind of sense. And those of us investors (myself included) who have been balking at valuations for several years now have missed out on gains by the likes of MSFT and Walmart stock, let alone the 100%+ gains that stocks like SNAP, SHOP, and BYND have posted.But, again, the question is whether this phenomenon can continue. Bearish investors would argue that, at some point, valuations have to matter. Valuations have to come down. And Walmart stock would seem to be a prime candidate for a valuation cut.After all, WMT is facing real challenges now. Amazon.com (NASDAQ:AMZN) is a formidable competitor. The Sam's Club concept has stalled out. Walmart's international earnings have declined for some time, though the stronger dollar is an issue. And WMT's earnings growth remains meager.It doesn't seem like Walmart stock should be valued at 20+ times its earnings, but the valuation of WMT stock may have less to do with its business than many investors believe.As of this writing, Vince Martin has no positions in any securities mentioned. More From InvestorPlace * 2 Toxic Pot Stocks You Should Avoid * 7 Stocks Top Investors Are Buying Now * The 10 Best Cryptocurrencies to Keep on Your Radar * 7 Marijuana Penny Stocks That Could Triple (But You Won't Make Money) The post Why Wall Street Bears Should Be Watching Walmart Stock Closely appeared first on InvestorPlace.
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If you've been paying attention, things haven't been going well for Facebook (NASDAQ:FB). Facebook stock can't seem to get any traction between scandals.Source: Shutterstock The FANG member had hoped that its new cryptocurrency- Libra- would be a game-changer. However, those operations have only left regulators even more frightened and could be D.O.A. before they really get started.At the same time, FB is now being forced to write a $5 billion check to the FTC following the Cambridge Analytica scandal.InvestorPlace - Stock Market News, Stock Advice & Trading TipsAdd in general public distrust and a growing deleteFacebook movement, and it's been tough to be FB stock investor. So, any good news on the Facebook front would be a welcome sign. * 9 Retail Stocks Goldman Sachs Says Are Ready to Rip And they just may get it on the virtual reality front.FB has long been a bit player in VR But these days, the tech firm is starting to gain some serious traction and score a series of big deals to usher in a new wave of virtual reality gaming. While it won't take the sting of a potential $5 billion fine away, it will help the medicine go down. In the end, VR gaming could be the next wave and diversified earnings stream that Facebook stock needs. Oculus and Facebook StockOne of the cool things about how modern tech firms operate is that can use the cash flows from their main businesses to sort of fund hobbies. Google (NASDAQ:GOOG) uses search revenues to fund Waymo and autonomous cars.Amazon (NASDAQ:AMZN) uses cash-flow heavy cloud operations to pay for its forays into new delivery options. What's great is that these hobby operations can (and often do) turn into big money makers for their owners.Facebook is no different in this regard. Its hobby happens to be virtual reality. When it bought Oculus back for $2 billion back in 2014, modern V.R. was in its infancy. Oculus didn't actually have a formal product and FB had no real direction for the division. And in fact, Oculus has been a point of contention within Facebook and has seen plenty of high-profile leadership departures.But these days, the hobby may be paying off. Last year, the firms released the tethered Oculus Rift headset and this year, it followed up with wireless Quest. The $399 fully wireless headset has turned out to be a smash hit for FB. So far, sales of the unit have grown more than 54% over 2018's numbers. That's managed to crush Facebook's own internal sales projections in a big way.The real end-user of the device has been surprising as well. So far, the bulk of sales has been for corporate training. Before last holiday season, Walmart (NYSE:WMT) began using the Oculus Go virtual reality headsets to train associates on "new technology, soft skills like empathy and customer service, and compliance." Here's What's Next for Facebook StockUsing VR for training has a long runway and will provide plenty of growth for FB and Oculus over the long haul. But the obvious play for the VR is just getting started and Facebook recently announced some big plans for the division.Virtually reality is made for gaming and the promise of using the tech for this purpose has been signaled since really the 1980s. Facebook has already seen some moderate success with games on the Oculus. But lately, Facebook has started to step up its partnerships and offerings in a big way.According to The Information, Facebook has signed exclusive deals for VR versions of immensely popular games "Assassin's Creed" and "Tom Clancy's Splinter Cell." Here, FB gets the only access to them for VR consoles.Given the immersion factor of these games, it's a huge coup for the Oculus platform. It also highlights, how Facebook's VR units could be sharing space with your Microsoft (NASDAQ:MSFT) Xbox in the near future. The Information also reports that Zuckerberg is looking into buying gaming studios outright in order to create IP and games exclusively for Oculus.With a price point comparable to other gaming units, the move into Oculus-exclusive games is great for the future. By buying its own studios and landing new games, Facebook is setting itself up to score more users, hardware sales and content revenues down the road.While VR revenues are a drop in FB's bucket today, the chance to bring VR to even a sliver more of Facebook's 2.38 billion monthly active users is certainly tantalizing. Zuckerberg has a goal of getting over a billion people into Facebook's VR operations. Gaming will help on that lofty goal. The Bottom Line on Facebook StockFor investors, the real moves in VR and the expansion of its gaming partnerships is a very bullish sign. Given that some of its other moves and classic business lines are coming under intense public and governmental scrutiny, gaming is a relatively safe bet that can generate some serious long-term revenues for the firm. And given its foothold as the only VR game in town, it's a huge advantage over other rivals.The best part is that this revenue stream will be far away from the problems of crypto and data mining.For investors, that could be a great long-term win for Facebook stock. In the end, it's showing that Facebook is taking its future seriously and that Oculus is turning into less of a hobby business and more into a serious money-maker.Disclosure: At the time of writing Aaron Levitt held a long position in AMZN stock. More From InvestorPlace * 2 Toxic Pot Stocks You Should Avoid * 9 Retail Stocks Goldman Sachs Says Are Ready to Rip * 7 Services Stocks to Buy for the Rest of 2019 * 6 Stocks to Buy and 1 to Sell Based on Insider Trading The post A Healthy VR Obsession Could Finally Start Paying off for Facebook Stock appeared first on InvestorPlace.
St. Louis Park officials aim to lay the groundwork for mixed-use redevelopment of a 13.5-acre commercial site near a future light rail station.