This is a step-by-step stock review to answer the question, is Walmart (WMT) stock a good buy?
This article will teach you how to use the 4Ms of investing. This will be a detailed walkthrough to show you how the 4Ms work and why they are important. If you are interested, you can log into Tykr to use the 4M Confidence Booster (Powered by OpenAI) which will allow you to complete a 4M Analysis in less than 60 seconds.
What are the 4Ms?
- MOS (Margin of Safety) – The MOS is the math part of investing which includes the Summary, Score, and MOS (Margin of Safety).
- Meaning – The meaning is the business model and how scalable the revenue streams are.
- Moat – The moat is how the business compares to other companies in the same Sector and Industry.
- Management – The management is the track record of the CEO.
What 4M score are we going for?
- 80-100 = High confidence – Yay! You should have high confidence buying this stock. It passes all 4M!
- 60-79 = Moderate confidence – Alert! There may be better stocks in the market. Only buy this stock if you truly believe the company will improve!
- 0-59 = Low confidence – Warning! There are better stocks in the market. Due to the low score, you should consider looking at other stocks.
Table of Contents
The following links will direct you to key topics to help answer the question, is Walmart (WMT) stock a good buy?
1. Walmart Company History
When investing in stocks, it’s important to know the company’s history. This helps us understand the various revenue streams, if they acquired other companies, how they grew through difficult times, and how they separated themselves from the competition.
- Founded in 1962 by Sam Walton in Rogers, Arkansas.
- Vision: Offer low prices to help people save money and live better.
- Growth: Expanded rapidly across the U.S. in the 1970s and 1980s.
- 1983: Introduced Sam’s Club, a membership-based warehouse club.
- 1988: Opened first Supercenter combining general merchandise and groceries.
- 1991: Went international, opening a store in Mexico City.
- 1999: Became the largest private employer in the world.
- 2000s: Focused on e-commerce, launching Walmart.com.
- 2016: Acquired Jet.com to boost online shopping experience.
- 2018: Partnered with Flipkart, India’s leading e-commerce site.
- Innovation: Implemented advanced technology like online grocery pickup and delivery.
- Sustainability: Committed to renewable energy and reducing waste.
- Today: Operates over 10,500 stores in 24 countries.
- Mission: Continues to provide everyday low prices and value to millions of customers worldwide.
Walmart’s history is a testament to its dedication to customer service, innovation, and sustainable growth. From a single store to a global retail giant, Walmart remains committed to saving people money and helping them live better lives.
2. MOS (Margin of Safety)
When investing in a company, the first step is to look at the financials. Fortunately, Tykr does this for us automatically. The higher the score, the stronger the financials and the safer the investment. The higher the MOS, the higher the potential returns you can make.
- Summary: watch
- Score: 56/100
- MOS: 1%
To see the most up-to-date Summary, Score, and MOS, please log into Tykr.
3. Meaning
When investing in a company, it’s important to know how a company makes money. A mature business model has multiple streams of revenue which allow the company to weather downturns in the economy.
Here is how Walmart (WMT) makes money:
- Selling products like groceries, clothing, electronics, and more in their stores.
- Operating Sam’s Club, where customers pay membership fees to shop in bulk.
- Offering online shopping through Walmart.com, where customers buy items and have them delivered.
- Providing services like pharmacy, money transfers, and auto care in Walmart stores.
- Renting out space in their stores to other businesses like hair salons and banks.
Walmart uses these various streams to maximize their earnings and provide diverse services to moviegoers.
Here are a few of the other companies that Walmart has acquired over the years. This is important because a company will use a “Buy before build” philosophy to go to market faster and add additional streams of revenue. A company with more revenue streams has a more stable business model. Keep in mind, that most companies don’t build new software because it takes too long to go to market and generate revenue.
- Jet.com
- Flipkart
- Moosejaw
- Bonobos
- ModCloth
- Parcel
- Cornershop
- Bare Necessities
- Art.com
4. Moat
When investing in a company, it’s important to understand how a company ranks against other companies in the same sector and industry. Based on the Score, here is how Walmart (WMT) stacks up against other companies.
- Target Corporation. (TGT) – 67
- BJ’s Wholesale Club Holdings, Inc. (BJ) – 61
- Walmart Inc. (WMT) – 56
- Dollar General Corporation. (DG) – 50
- Dollar General Corporation. (DG) – 28
To see the most up-to-date Summary, Score, and MOS and each stock, please log into Tykr.
5. Management
When investing in a company, it’s important to understand who the CEO is, what they have accomplished in the past, and how they have helped this company grow. Good leaders typically have stronger cultures, less turnover, and better returns in the stock market.
- Doug McMillon became the CEO of Walmart in 2014.
- Under his leadership, Walmart expanded its e-commerce presence significantly.
- He focused on improving employee wages and benefits, including raising the minimum wage for Walmart employees.
- McMillon implemented sustainability initiatives, aiming for zero waste and renewable energy.
- He oversaw the acquisition of several companies, like Jet.com and Flipkart, to bolster Walmart’s online presence.
- McMillon led efforts to invest in workforce training and education programs for Walmart employees.
- He emphasized customer experience, introducing initiatives like curbside pickup and same-day delivery.
- McMillon worked to strengthen Walmart’s international operations, with expansions in markets like India and China.
- He prioritized diversity and inclusion within the company, aiming for more diverse leadership and workforce.
- McMillon navigated Walmart through challenges like the COVID-19 pandemic, ensuring essential supplies and safety measures for customers and employees.
6. 4M Score
All of our homework on this company leads up to the 4M Score. A lot of investors only look at the numbers. Yes, it’s important to look at the first M (MOS) which is the math part of investing but it’s also important to look past the numbers and also look at the Meaning, Moat, and Management. If all 4Ms pass, we should have high confidence in buying this stock.
What 4M score are we going for?
- 80-100 = High confidence – Yay! You should have high confidence buying this stock. It passes all 4M!
- 60-79 = Moderate confidence – Alert! There may be better stocks in the market. Only buy this stock if you truly believe the company will improve!
- 0-59 = Low confidence – Warning! There are better stocks in the market. Due to the low score, you should consider looking at other stocks.
👉 The 4M Score of Walmart (WMT) is 66/100.
To see the most up-to-date 4M Score, please log into Tykr.
7. Is Walmart (WMT) stock a good buy?
Some of the top questions investors can have is Walmart (WMT) stock a good buy or should I buy Walmart (WMT) stock?
Investing in Walmart can be a smart choice. Walmart is a global retail giant with a strong market presence, extensive supply chain, and diverse product offerings. It consistently generates high revenue and profits, even during economic downturns. Walmart’s e-commerce growth and innovation in technology enhance its competitiveness. Additionally, its focus on sustainability and renewable energy appeals to socially responsible investors. However, competition from other retailers and online giants like Amazon can impact Walmart’s market share. It’s crucial to consider these factors and perform thorough research before investing.
—
To truly know if Walmart is a good stock to buy or sell, we recommend you log into Tykr. Within seconds you can see the Summary, Score, MOS, and 4M Score.
If you found this stock review interesting, you may also like this review on Peloton.