Investors have come to expect three absolutes: death, taxes and Wal-Mart (WMT +0.66%) shares never going anywhere. But one of those could soon change.
For the last decade, Wal-Mart shares have been mostly stuck in the $50 to $60 range even though its revenue and profits have seen predictable growth. It drove investors nuts.
But we may just be witnessing a breakout. Wal-Mart shares hit a new 52-week high today at $61.11, briefly topping its previous 52-week high of $61.06, TheStreet reports. A look at the last three months shows this is a stock on the move. Shares have climbed 8% in that time and show no signs of stopping.
The momentum is just enough, in fact, that investors are starting to wonder if Wal-Mart can break free of the last 10 years for good. The stock is approaching the 10-year high of $63.75 it hit in March 2002, Seeking Alpha reports.
And maybe, just maybe, it’s on track to beat the all-time high of $67.37 set in late 1999.
What’s going on with Wal-Mart? A lot.
First of all, the stock was one of the best blue-chip performers in 2011, rising nicely over the last year. And Wal-Mart loves to buy back its own shares. In fact, its buybacks have reduced the number of its shares outstanding to 3.5 billion from 4.1 billion in 2007, The Motley Fool reports.
More important, however, is that the company’s U.S. turnaround efforts seem to be working. It stopped a precarious slide in same-store sales and is trying a number of new strategies to stay competitive. One of the best ideas? Downsizing its stores to make them easier for shoppers to get in and out of.
Wal-Mart is also focusing on a number of in-store services, not the least of which is banking and other financial services. It’s not going to be a full-scale bank anytime soon, but it easily handles check-cashing and other services at prices many traditional banks can’t match. It’ll even do your income-tax returns for a low fee.
It’s also making a renewed push into e-commerce, recently hiring an executive from CBS Interactive to run online operations.
It’s likely that investor anticipation will continue to build ahead of Wal-Mart’s fourth-quarter earnings report, scheduled for Feb. 21. Analysts are expecting earnings to grow at about 8% to $1.45 a share.
via Could Wal-Mart break out of its rut?- MSN Money.
