In the past 12 months, Walmart (WMT, Financial) insiders have sold a total of 112.7 million shares compared to the 2 million shares they bought in the same period last year.
With Walmart trading 16.5% off its all-time high of $109.98 achieved in January, insiders may still be using this opportunity to cash in some of their long-held Walmart stock investments.
Walmart’s market valuation has primarily continued growing throughout its history and has rewarded long-term investors in the process. A $10,000 investment back in 2010 would have generated an 8.8% annual total return or would now be $21,269.31 as of last Friday.
A review of Walmart’s operations this year indicated steady revenue growth. The company logged a strong 3.2% increase year-to-date compared to a three-year average of 1%. Its e-commerce business also grew 43% year-over-year in its recent quarter. Further, the company remained on track to meet its comparable sales — a critical industry metric — target of at least 3% by end of its fiscal year operations in January 2019.
Almost all of Walmart’s businesses have delivered relatively strong growth except for when it sold its stake in Walmart Brazil at a loss of $6.7 billion (as of July), and it has seen a $1.9 billion decline in market value of its investment in Beijing-based JD.com.
These challenges caused Walmart to lower its earnings-per-share guidance to a range of $2.26 to $2.36 this fiscal year compared to a target of $3.28 in the previous year.
Despite the company’s huge exposure to China via its investment in JD.com, Walmart’s operations in the country appear to be manageable, representing 2.2% or $8.3 billion of its year-to-date operations. As a group, Walmart’s international sales grew 4.2% so far this year.
For dividend investors, Walmart also maintained its strong coverage of its dividend payouts, with a free cash flow payout ratio of 85% so far this year.
Meanwhile, analysts have similar earnings expectations for the company for this fiscal year and have an average price target of $106.23 compared to its recent price of $91.85.
Disclosure: Long Walmart.
Read more here:Ă‚
Charlie Munger: A Deeper Dive Into Moats
Charlie Munger: A Lattice of Mental Models and Worldly Wisdom
