Is Wal-Mart Undervalued at Current Prices?

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With shares of Wal-Mart (NYSE:WMT) trading around $72, is WMT an OUTPERFORM, WAIT AND SEE, or STAY AWAY? Let’s analyze the stock with the relevant sections of our CHEAT SHEET investing framework:

T = Trends for a Stock’s Movement

Wal-Mart operates retail stores in various formats around the world. The company aims to price items at the lowest price every day. Wal-Mart operates in three business segments: the Walmart U.S. segment, the Walmart International segment, and the Sam’s Club segment. It manages retail stores, restaurants, discount stores, supermarkets, supercenters, hypermarkets, warehouse clubs, apparel stores, Sam’’s Clubs, neighborhood markets, and other small formats, as well as Walmart.com and Samsclub.com. Through its retail channels, Wal-Mart is able to provide a variety of products and services at very affordable prices to consumers and companies worldwide.

Wal-Mart has stopped expansion in India while the company is under two different investigations there and the government has tightened regulations on foreign-owned retail businesses. The Indian government is investigating Wal-Mart for a loan the company took out that would become equity once the government changed regulations to allow foreign ownership of front-end grocery stores. Wal-Mart is also investigating whether some of its employees in the country broke the U.S. Foreign Corrupt Practices Act by bribing officials to open stores.

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