Author Topic: WMT - Walmart Inc  (Read 50620 times)

DeepSouth

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Re: WMT - Walmart Inc
« Reply #140 on: April 23, 2018, 11:14:26 AM »
"Whatever AMZN isn't spending on Flipkart, they can still spend on India, and that might be a high return use for the capital."

I know what you mean, but I laughed a little bit inside when you say that Amazon has a high return use for capital.

Amazon may just be trying to up the bid that Wal-Mart needs to pay in order to compete head-to-head in India.  FlipKart may have the lead in India, but Amazon is definitely a formidable opponent.  It may be a case where Amazon is trying to weaken its competition by forcing them to bid a higher price.

Why is it funny? They've created hundreds of billions in value with $27B in B/S equity.


Liberty

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Re: WMT - Walmart Inc
« Reply #141 on: April 23, 2018, 12:43:59 PM »
"Whatever AMZN isn't spending on Flipkart, they can still spend on India, and that might be a high return use for the capital."

I know what you mean, but I laughed a little bit inside when you say that Amazon has a high return use for capital.

I believe it does. It's using the high-return, mature parts of the business to finance the early-stage, still loss-making startups within the large 'conglomerate'.
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JRM

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Re: WMT - Walmart Inc
« Reply #142 on: April 23, 2018, 03:17:46 PM »
The thought that immediately jumped in my mind is that they enter a new "vertical" by operating at a loss and taking out any and all incumbents.  The short term returns are sacrificed for long term market control. I remember the outrage over Wal-Mart in the 1990's killing small businesses.  Somehow Amazon gets a free pass. 

merkhet

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Re: WMT - Walmart Inc
« Reply #143 on: April 23, 2018, 06:27:41 PM »
Part of the reason Amazon isn't moving more aggressively is that it's already the second largest e-commerce operator in India. There are some concerns that a combination with Flipkart won't fly with regulators.

Liberty

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Re: WMT - Walmart Inc
« Reply #144 on: May 09, 2018, 08:41:11 AM »
Looks like they finally did it:

https://www.wsj.com/articles/walmart-agrees-to-buy-77-stake-in-flipkart-for-16-billion-1525864334

Quote
Walmart Inc.  said Wednesday it had agreed to take control of India’s largest e-commerce company, Flipkart Group, for $16 billion, the largest acquisition in the Bentonville, Ark.-based retailer’s history as it tries to fend off Amazon.com Inc.  at home and abroad.
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longinvestor

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Re: WMT - Walmart Inc
« Reply #145 on: August 16, 2018, 10:23:31 AM »
WMT doing well with eCommerce. Earnings are stellar. It’s just a matter of time when they broadcast “no membership fees” to go after AMZN. Kinda like Southwest’s “bags fly free”. That one is a repeated body blow to other airlines as passengers cringe when they pay $25 and 50 at each check in.

glorysk87

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Re: WMT - Walmart Inc
« Reply #146 on: August 17, 2018, 07:45:26 AM »
Paying 20x earnings for a low single digit top line grower that has years of margin compression ahead of them as they invest relentlessly to attack an almost trillion dollar competitor strikes me as...not great risk/reward.

ScottHall

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Re: WMT - Walmart Inc
« Reply #147 on: August 18, 2018, 03:18:43 AM »
Multiples don't matter so much if war is afoot. The question is who will win and eat the other's lunch. I don't own WMT because they let Jeff Bezos build a massive head start but am open to changing my mind.

War creates disruption and markets experiencing disruption can see large market share changes. If you believe WMT can capitalize on that by going on the aggressive against Jeff Bezos, cutting margins may not be that big of a deal depending on the narrative shift it creates.

If WMT cut margins but revenue growth accelerated to double digits, the market may not find that so horrifying in the current environment. Some would say the Walton family cutting the dividend and reinvesting in their moat would make them "Outsiders."
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longinvestor

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Re: WMT - Walmart Inc
« Reply #148 on: August 18, 2018, 08:06:29 AM »
Walmart appears to be using the eCommerce by pouring more concrete into their base business. The ship-to-store option is a low overall cost strategy, it leverages their massive logistics footprint. When I'm shopping on Walmart.com, I find that they are nudging me to the pick-up-at-the-store option versus shipping to the house. The co location of Sam's Club and the gas station in the same parking lot as Wal-Mart appears to be a key advantage. Becoming increasingly a one-stop shop, I expect them to drive a strategy of attracting more essential services (Food, haircut etc.) to the premises. Nothing new, but more of it.     

JRM

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Re: WMT - Walmart Inc
« Reply #149 on: August 18, 2018, 08:19:29 AM »
60% of the U.S. population lives within 5 miles of a Wal-Mart, and 96% lives within 20 miles.  Wal-Mart has a temporary solution for the last mile and instant delivery problems, let the customer come and pick it up.  There are many times two day shipping simply will not suffice and I drive to Wal-Mart.  If they have it waiting for me to pick up so I don't get out of my car, even better. 

I recommended to family to invest in Wal-Mart when it was in the 50's; I wish I took my own advice.
« Last Edit: August 18, 2018, 11:04:24 AM by JRM »