Analysts are positive on the company’s outlook, pointing to improved cash flow and better merchandising of private label clothing.
Per the chart below, the stock is up nearly 20% since the beginning of the year.
Now is also the time to revisit the Wal-Mart Suppliers ETF (NYSEArca: WSI) launched by FocusShares last year. WSI tracks an index of 30 companies that supply Wal-Mart and derive a substantial portioin of their revenue from the mega-retailer.
Top holdings include such household names as Hasbro (NYSE: HAS), General Mills (NYSE: GIS), Kellogg (NYSE: K), Mattel (NYSE: MAT) and Activision (Nasdaq: ATVI).
The logic of holding the Wal-Mart Suppliers ETF instead of the retailer is that you get exposure to Wal-Mart’s growth while reducing risk with a diversified portfolio.
The concern with this ETF is the small size ($4.5 million according to Yahoo finance) and lack of active trading which can drag down returns due to larger bid-ask spreads and potential tracking error.
For more information, see the FocusShares website.