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I have owned Walmart (WMT) for a couple of years now. Everything was going smoothly until a year ago when it reported a bad quarter and the stock got smashed (you can clearly see the sell-off in the chart provided). So, what did I do? I bought more.

WMT now makes up ~7% of my long/short portfolios. My average price is $140, and it closed Friday at $154. It pays a 1.49% dividend.

I’m looking at the stock this morning as it is heading into earnings next Thursday morning. Last quarter, WMT guided current year EPS to $5.90-$6.05. At the midpoint, that equates to a 25.6x multiple at the current price. That is not cheap.

But WMT is the essential consumer staples go-to for the majority of middle class and lower middle class Americans because of its low prices. If the economy is going through a rough spell, then that means the cycle is also in favor of WMT as more consumers will shift down.

So while I don’t see a great edge in WMT, I think the stock will continue to make steady progress higher of 10-12% per year, and I’m happy to hold on for that. There’s always the temptation to try to hit home runs, but singles get the job done with a lot less risk.

#earnings for the week https://t.co/lObOE0dgsr $BABA $HD $WMT $MNDY $TGT $SE $BIDU $WKHS $AZUL $NU $CSCO $DE $TJX $AMAT $QBTS $CSIQ $ONON $JACK $FREY $CTLT $ARCO $TSEM $TRVN $INVO $SBLK $DLO $NOVN $AMPS $GBNH $PSFE $ZEV $FL $SQM $LSPD $WIX $STNE $DT $GRAB $TME $SNPS $MMYT… pic.twitter.com/Zd36bMTZOj

— Earnings Whispers (@eWhispers) May 12, 2023

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