Walmart Posts New All-Time High

Shares of Wal-Mart Stores Inc. (NYSE: WMT) posted an all-time high over $73/share this morning as investors continue to react to yesterday’s terrible earnings report from Supervalu Inc. (NYSE: SVU). In comments on Supervalu’s earnings, the company’s CEO said that Supervalu needs to get prices set correctly in order to compete with big box stores like Walmart and Target Corp. (NYSE: TGT) which use groceries as a lure to get shoppers into their stores.

Safeway Inc. (NYSE: SWY), like Supervalu, is caught in a trap between Walmart and Target and more upscale grocers like Whole Foods Market Inc. (NASDAQ: WFM). Deep discounters like Dollar General Inc. (NYSE: DG) draw budget-conscious shoppers from both traditional grocers and from the big box stores. Club stores like Costco Wholesale Corp. (NASDAQ: COST) and Walmart’s Sam’s Club stores have also had a negative impact on traditional grocery store sales.

But Walmart’s grocery strategy continues to generate traffic and the company appears to have dodged any significant negative sentiment as a result of the bribery charges in Mexico. Warren Buffett even added more than 7.5 million shares of Walmart stock to his portfolio in the first quarter of this year, bringing his total holdings in the store to just over 46.7 million shares. At today’s share price that’s about $3.4 billion, up something like $600 million since May 15th. Not bad for two month’s “work.”

Walmart shares are trading at $73.04 in mid-afternoon after posting a new 52-week (and all-time) high of $73.05. The previous range was $48.31-$72.62.

Walmart is one of the stocks we noted in our review stocks entering a dividend bubble.

Paul Ausick