ValuEngine Weekly: Consumer Stocks,WW Grainger,and Wal-Mart

8/20/2019 ValuEngine Weekly: Consumer Stocks,WW Grainger,and Wal-Mart

1/9

October 16, 2015

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VALUATION WATCH: Overvalued stocks now make up 44.!" o# ourstocks ass$%ned a valuat$on and &4.'" o# t(ose e)u$t$es are calculated to*e overvalued *+ !" or more. ,our sectors $s calculated to *eovervalued. overvalued.

MARKET OVERVIEW

Inde- tarted week ,r$da+ A/ C(an%e C(an%e " +td

01IA %&()")* %&%++", 23.& .43" 3.2'"

NA0A5 (,*"&* (&)", 3!.!4 .62" 3.2"

7U8LL ! %%.+"+ %%+*",& 6.9 .'!" 3.26"

; ' )%+".+ ))"*)


2/9

SECTOR OVERVIEW

ector C(an%e /T0 =T0 Valuat$on Last &!/

7eturn

;>8

7at$oAerospace "+/ ,"((/ -)"))/ "&/ undervalued -,")&/ %&",

AutoT$resTrucks %"%*/ ("&(/ -,"+)/ *"&/ undervalued %"**/ %,"&

?as$c /ater$als %")/ %)"(./ -%)"(/ *"./ undervalued -)"%/ )"))

?us$ness erv$ces %")+/ +",/ %"%/ ."%/ overvalued )")/ ),"

Computer and Tec(nolo%+ %"%(/ +"((/ -"./ "(*/ undervalued +")/ )*")

Construct$on %",./ +"/ -"(*/ +"./ undervalued &")./ )"(%

Consumer 0$scret$onar+ %"&+/ +"+&/ ,"&/ %"+(/ undervalued ,"*&/ )."

Consumer taples "&*/ +"%,/ -%"/ ,",+/ overvalued +"*/ )"+.

,$nance %",/ ,"&%/ "../ "/ overvalued %"./ %."&)

Industr$al ;roducts "*(/ &"./ -&")/ ",/ undervalued -("%./ %("%)

/ed$cal %"((/ ,")/ ")/ %"*/ undervalued *"+)/ )*"*&

/ult$ector Con%lomerates "((/ +"*%/ -*"&/ "%%/ overvalued -."%/ )%"%

O$ls8ner%+ %"%/ %"*&/ -%+"(%/ ."%/ undervalued -,."/ )."&(

7eta$lW(olesale "*+/ ,"%/ -."*+/ "+/ undervalued )")/ ))"*

Transportat$on %")&/ ."&%/ -%%")/ &".(/ undervalued -"%&/ %+"(.

Ut$l$t$es %"((/ &",/ -,"(,/ "*/ overvalued -%"()/ ))"+&

Sector Talk—Cons!er "#scret#onar$Below, we present the latest data on leading Consumer Discretionary Sector

stocks from our ;ro#ess$onal tock Anal+s$s erv$ce. These results were filtered bymarket price and volume--no results below 3!share or less than "##k shares!dayvolume$

Top,$ve Consumer 0$scret$onar+ ector tocks(ortTerm ,orecast7eturns

T$cker Compan+ Name /arket ;r$ce Valuat$on Last &!/ 7etrnOUT7 01TE2W344 I56 +*",) -)"%/ %".,/

T7@A 7T328-4I9 63:-3 ,(". -,)",*/ ))"%%/

A/C 3;6 5ETW021E?3 E?16-3?2 +")+ 5@3 &*"&*/

http://www.valuengine.com/pub/VeSubscribeInfohttp://www.valuengine.com/pub/main?i=0http://www.valuengine.com/pub/main?i=0http://www.valuengine.com/pub/main?i=0http://www.valuengine.com/pub/VeSubscribeInfohttp://www.valuengine.com/pub/main?i=0http://www.valuengine.com/pub/main?i=0http://www.valuengine.com/pub/main?i=0


3/9

Top,$ve Consumer 0$scret$onar+ ector tocksLon%Term ,orecast7eturns

T$cker Compan+ Name /arket ;r$ce Valuat$on Last &!/ 7etrn

OUT7 01TE2W344 I56 +*",) -)"%/ %".,/

T7@A 7T328-4I9 63:-3 ,(". -,)",*/ ))"%%/

A/C 3;6 5ETW021E?3 E?16-3?2 +")+ 5@3 &*"&*/

Top,$ve Consumer 0$scret$onar+ ector tocksCompos$te core

T$cker Compan+ Name /arket ;r$ce Valuat$on Last &!/ 7etrn

T7@A 7T328-4I9 63:-3 ,(". -,)",*/ ))"%%/

OUT7 01TE2W344 I56 +*",) -)"%/ %".,/

WH7 W=I24:004 602: %+%"+% -%&"*&/ ")+/

A/C 3;6 5ETW02


4/9

%ree "o&nloa' (or Rea'ers (s a 0onus to our Free Weekly #ewsletter su0scri0ers,

we are offering a F.EE $W#&$( of one of our Stock .eports

%rainger &%''( offers a breadth of )*+ solutions by combining products,

services, and information$ The company tailors its capabilities toward the obective ofproviding the lowest total cost )*+ solution to select customer groups$ The Branch-based Distribution Businesses serve immediate and!or planned purchase )*+ needs$

The Digital Businesses offer a broad array of indirect materials and related informationto meet the needs of businesses looking to reduce process costs through nternet-enabled solutions$

.alu/ngine continues its 0+1D recommendation on %*2%/* ' ' for 4#"5-

"#-"5$ Based on the information we have gathered and our resulting research, wefeel that %*2%/* ' ' has the probability to *+6%017 )2TC0 average market

performance for the ne8t year$ The company e8hibits 2TT*2CT./ Company Si9e but62TT*2CT./ Book )arket *atio$

.ead our 1omplete etailed Valuation .eport on 'rainger H878.

http://www.valuengine.com/download/report/TMP_VE_GWW_20151016009193.pdfhttp://www.valuengine.com/images/newsletter/weekly/151016GWWchart.ashxhttp://www.valuengine.com/download/report/TMP_VE_GWW_20151016009193.pdf


5/9

ValuEngine Forecast

Target:rice;

/8pected*eturn

1-onth 44"$

!-onth 44"$?5 #$"=>

"-onth 443$3@ #$

1-#ear 444$?5 #$@#>

$-#ear 44"$4? -#$"5>

!-#ear 433$@4 5$=">

Valuation % Ran&ingsValuation undervalued Valuation Ran& &( 5A

1- Forecast Return #$#5> 1- Forecast Return Ran& 5=

1$- Return - o'entu' Ran& &( ==

(har)e Ratio #$ Volatility Ran& &( A"

E)ecte E.( /rowth 5$# E.( /rowth Ran& &( 34

ar&et Ca) 0billions "5$"" (i2e Ran& ?3

3railing .4E Ratio "A$"4 3railing .4E Ran& &( @3

Forwar .4E Ratio "


6/9

W)at*s +ot

WalMart S)ares "#-e On .a' /e&s

'al-)art Stores, nc$ &')T( is the worlds largest retailer$ They are engaged inthe operation of mass merchandising stores, which serve their customers primarilythrough the operation of three segments, which are the 'al-)art Stores segment, theS2)S Club segment and the nternational segment$

'al-)art provided its strategic outlook and growth plans for the future at thecompanys 44nd annual meeting for the investment community at its headEuarters inBentonville, 2rkansas this week and the fallout was +T good for the giant retailer$$

The company had bad news for investors, and indicated that as a result of astronger than anticipated impact from currency e8change-rate fluctuations, it now

e8pects net sales growth for the current fiscal year to be relatively flat$ Charles 0olley,'almarts e8ecutive vice president and chief financial officer, brought more badnews, noting that

operating income is e8pected to be impacted by appro8imately "$5 billionfrom the second phase of our previously announced investments in wages

and training as well as our commitment to further developing a seamlesscustomer e8perience$ 2s a result of these investments, we e8pect earningsper share to decline between @ and "4 percent in fiscal year 4#"


7/9

But, will these moves be enough to restore profits, please investors, and makethe stores a place shoppers enoy spending their money Clearly, low prices arent

enough these days$ )any 6S shoppers refuse to patroni9e the stores due to the

chaotic atmosphere, surly employees, poor customer service, etc$ Target, which ishardly a bastion of good labour practices, enoys a far better reputation amongst

consumers$

So, what can we draw on here moving forward s this ust another Chinese

currency-devaluation hiccup s this the price to be paid for finally giving workers abigger piece of the pie and adusting some of the most regressive labor policiesamongst 6S firms--but, if so, then how can the company also start a 4# billion share

buyback 0as the firms aggressive e8pansion finally gone too far s this a retailerthat got too big and made bad moves +r more of a leading indicator of trouble in

the 6S recovery 2nd, how will this sort of news effect the decision-making process atthe Jed when the ne8t discussion of rate increases comes up

Bye Bye Profits?

Below is todays data on ')TK

.216/%/ */C+))/D2T+K .alu/ngine continues its 0+1D recommendationon '21-)2*T ST+*/S for 4#"5-"#-"5$ Based on the information we have gathered

and our resulting research, we feel that '21-)2*T ST+*/S has the probability to*+6%017 )2TC0 average market performance for the ne8t year$ The companye8hibits 2TT*2CT./ Company Si9e but 62TT*2CT./ /arnings %rowth *ate$


8/9

ValuEngine Forecast

Target

:rice;

/8pected

*eturn

1-onth 5?$5@ #$3?>

!-onth 5?$@@ #$55>

"-onth @#$"" "$3">

1-#ear @4$"= =$

$-#ear 55$"4 -

!-#ear @ undervalued Valuation Ran& &( 1- Forecast Return Ran&


9/9

VE Stock Anal$s#s (or In'#-#'al In-estors

ts been a cra9y Summer of volatility and as the weather cools, the market istrying to put in another leg up$ The latest from the Jed indicates that an interest rateboost will be later rather than sooner$ 2nalysts have been calling a bottom for oil, and

many investors are looking for bargains$ +ur valuation metrics show that recentlystocks were cheaper than they have been since ovember, 4#"4--when the SL: 5##was at "=##$

But where to put your hard-earned capital There are so many companies,/TJs, etc$ out there$ 'hy not narrow down your potential targets and save time by

focusing on specific, high-Euality eEuities that can really boost your portfoliosperformance with ValuEngine6s (toc& +nalysis (ervice7

+ur VE (toc& +nalysis (ervice for Iniviual Investors gives you access to the

power of .alu/ngine right on our website$ t includes everything you need to makethe ./ Stock /valuation )odels work for you and substantially increase your chancesof success in the market$ 'ebsite access includes our 2dvanced Screening tools,

Detailed Stock .aluation and Jorecast data on more than

ValuEngine Weekly: Consumer Stocks,WW Grainger,and Wal-Mart

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Transcript of ValuEngine Weekly: Consumer Stocks,WW Grainger,and Wal-Mart